Federal Agency Final Regulations Implementing Executive Order 13559: Fundamental Principles and Policymaking Criteria for Partnerships With Faith-Based and Other Neighborhood Organizations

Federal RegisterApr 4, 2016

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DEPARTMENT OF EDUCATION

2 CFR Part 3474

34 CFR Parts 75 and 76

[ED-2014-OS-0131]

RIN 1895-AA01

DEPARTMENT OF HOMELAND SECURITY

6 CFR Part 19

[Docket No. DHS-2006-0065]

RIN 1601-AA40

DEPARTMENT OF AGRICULTURE

7 CFR Part 16

RIN 0503-AA55

AGENCY FOR INTERNATIONAL DEVELOPMENT

22 CFR Part 205

RIN 0412-AA75

DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

24 CFR Parts 5, 92, 570, 574, 576, 578, and 1003

[Docket No. FR-5781-F-02]

RIN 2501-AD65

DEPARTMENT OF JUSTICE

28 CFR Part 38

[Docket No. OAG 149; AG Order No. 3649-2016]

RIN 1105-AB45

DEPARTMENT OF LABOR

29 CFR Part 2

RIN 1290-AA29

DEPARTMENT OF VETERANS AFFAIRS

38 CFR Parts 50, 61, and 62

RIN 2900-AP05

DEPARTMENT OF HEALTH AND HUMAN SERVICES

45 CFR Parts 87 and 1050

RIN 0991-AB96

Federal Agency Final Regulations Implementing Executive Order 13559: Fundamental Principles and Policymaking Criteria for Partnerships With Faith-Based and Other Neighborhood Organizations

AGENCY:

Department of Education, Department of Homeland Security, Department of Agriculture, Agency for International Development, Department of Housing and Urban Development, Department of Justice, Department of Labor, Department of Veterans Affairs, Department of Health and Human Services.

ACTION:

Final rule.

SUMMARY:

The Agencies publishing this final rule amend or establish their regulations to implement Executive Order 13279, as amended by Executive Order 13559. Executive Order 13279 established fundamental principles to guide the policies of Federal agencies regarding the participation of faith-based and other community organizations in programs that the Federal agencies administer. Executive Order 13559 amended Executive Order 13279 to clarify those principles and add certain protections for beneficiaries of Federal social service programs.

DATES:

Effective Date:

These regulations are effective on May 4, 2016.

Compliance Date:

Recipients of Federal financial assistance to which these regulations apply must comply with these final regulations by July 5, 2016.

FOR FURTHER INFORMATION CONTACT:

For general information, please contact Melissa Rogers, White House Office of Faith-Based and Neighborhood Partnerships, 202-456-3394 or via email at

whpartnerships@who.eop.gov.

For information regarding each agency's implementation of these final regulations, the contact information for that agency follows.

• DEPARTMENT OF EDUCATION: Rev. Brenda Girton-Mitchell, Director, Center for Faith-Based and Neighborhood Partnerships, Office of the Secretary, U.S. Department of Education, 400 Maryland Avenue SW., Room 1E110-A, Washington, DC 20202-6132, Telephone: 202-401-1876. If you use a telecommunications device for the deaf (TDD) or a text telephone (TTY), call the Federal Relay Service (FRS), toll-free, at 1-800-877-8339.

• DEPARTMENT OF HOMELAND SECURITY: Scott Shuchart, Office for Civil Rights and Civil Liberties, Department of Homeland Security, 202-401-1474 (telephone), 202-357-1196 (facsimile),

scott.shuchart@hq.dhs.gov

(email). If you use a telecommunications device for the deaf (TDD) or a text telephone (TTY), call the Federal Relay Service (FRS), toll-free, at 1-800-877-8339.

• DEPARTMENT OF AGRICULTURE: Norah Deluhery, Director, Center for Faith-Based and Neighborhood Partnerships, U.S. Department of Agriculture, 1400 Independence Avenue SW., Washington, DC 20250; telephone number 202-720-2032 (this is not a toll-free number). Persons with disabilities or who require alternative means of communication (Braille, large print, audio tape, etc.) should contact the USDA Target Center at 202-720-2600 (voice and TDD).

• AGENCY FOR INTERNATIONAL DEVELOPMENT: J. Mark Brinkmoeller, Director, Center for Faith-Based and Community Initiatives, USAID, Room 6.07-023, 1300 Pennsylvania Avenue NW., Washington, DC 20523; telephone: 202-712-4080 (this is not a toll-free number). If you use a telecommunications device for the deaf (TDD) or a text telephone (TTY), call the Federal Relay Service (FRS), toll-free, at 1-800-877-8339.

• DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT: Paula Lincoln, Director, Center for Faith-Based and Neighborhood Partnerships, Department of Housing and Urban Development, 451 7th Street SW., Room 10184, Washington, DC 20410-7000; telephone number 202-708-2404 (this is not a toll-free number). If you use a telecommunications device for the deaf (TDD) or a text telephone (TTY), call the Federal Relay Service (FRS), toll-free, at 1-800-877-8339.

• DEPARTMENT OF HEALTH AND HUMAN SERVICES: Acacia Bamberg Salatti, Director, U.S. Department of Health and Human Services Center for Faith-Based and Neighborhood Partnerships, 200 Independence Avenue SW., Room 747D, Washington, DC 20201 or via email at

partnerships@hhs.gov,

telephone: 202-358-3595, fax: 202-205-2727. If you use a telecommunications device for the deaf (TDD) or a text telephone (TTY), call the Federal Relay Service (FRS), toll-free, at 1-800-877-8339.

• DEPARTMENT OF JUSTICE: Theron Pride, Chief of Staff/Senior Counsel, Office of the Assistant Attorney General, Office of Justice Programs, U.S. Department of Justice, Washington, DC 20531; telephone: 202-307-5933. If you use a telecommunications device for the deaf (TDD) or a text telephone (TTY), call the Federal Relay Service (FRS), toll-free, at 1-800-877-8339.

• DEPARTMENT OF LABOR: Naomi Barry-Pérez, Director, Civil Rights Center, U.S. Department of Labor, Frances Perkins Building, 200 Constitution Ave. NW., Room N-4123, Washington, DC 20210; telephone: 202-693-6500. Please note this is not a toll-free number. If you use a telecommunications device for the deaf (TDD) or a text telephone (TTY), call the Federal Relay Service (FRS), toll-free, at 1-800-877-8339.

• DEPARTMENT OF VETERANS AFFAIRS: Stephen B. Dillard, Deputy Director, Faith-based and Neighborhood Partnership (00FB), Office of the Secretary, Department of Veterans Affairs, 810 Vermont Ave. NW., Washington, DC 20420, 202-461-7689. (This is not a toll-free telephone number.) If you use a telecommunications device for the deaf (TDD) or a text telephone (TTY), call the Federal Relay Service (FRS), toll-free, at 1-800-877-8339.

SUPPLEMENTARY INFORMATION:

On Thursday, August 6, 2015, the nine agencies participating in this joint final rulemaking each published a separate notice of proposed rulemaking (NPRM) in volume 80 of the

Federal Register

, as follows:

1. Agency for International Development (USAID), 80 FR 47237;

2. Department of Agriculture (USDA), 80 FR 47243;

3. Department of Education (ED), 80 FR 47253;

4. Department of Health and Human Services (HHS), 80 FR 47271;

5. Department of Homeland Security (DHS), 80 FR 47283;

6. Department of Housing and Urban Development (HUD), 80 FR 47301;

7. Department of Justice (DOJ), 80 FR 47315;

8. Department of Labor (DOL), 80 FR 47327;

9. Department of Veterans Affairs (VA), 80 FR 47339.

This preamble refers to these agencies as “the Agencies.” This final rulemaking notice publishes the final regulations of all the Agencies in a single document. The Agencies decided to publish a joint final rule because most of the comments received by the Agencies addressed issues that were relevant to all of the Agencies' proposed rules. This final rule addresses cross-cutting issues first, followed by separate agency-specific discussions of issues particular to each Agency. Following the preamble, each Agency makes final amendments to its regulations or establishes new final regulations, in CFR title and part order, to implement the requirements in Executive Order 13279, as amended by Executive Order 13559.

The final rule is broken up into six major parts, organized as follows:

USAID does not fund programs involving indirect Federal financial assistance, as that term is used within these final regulations, and is not establishing new requirements for written notices to be provided to beneficiaries or for referrals to alternative providers. Thus, USAID does not join in parts III.B and III.D of this preamble.

I. Background

II. These Final Regulations

III. Cross-Cutting Public Comments

A. Prohibited Use of Direct Federal Financial Assistance

1. “Explicitly Religious” Activities

2. Chaplaincy

3. Nondiscrimination and Programs Funded in Part by Federal Financial Assistance

B. Direct and Indirect Federal Financial Assistance

C. Intermediaries

1. Compliance

2. Comprehension of Requirements

D. Protections for Beneficiaries

1. Beneficiary Notice

2. Referrals

E. Political or Religious Affiliation

1. Merit-Based Decisions

2. Access to Federal Funding

3. Political Influence

F. Monitoring

G. Other Issues

1. Nondiscrimination in Employment Decisions/Religious Freedom Restoration Act

2. Reinforcement of Other Nondiscrimination Protections

3. Applicability to Sub-Awards, Including Contracts

4. Definitions for “Social Service Program” and “Federal Financial Assistance”

5. Display of Religious Symbols

6. Eligibility of Faith-Based Organizations to Receive Federal Funding

7. Training Requirements

IV. Agency-Specific Issues and Certifications

A. Department of Education

B. Department of Homeland Security

C. Department of Agriculture

D. Agency for International Development

E. Department of Housing and Urban Development

F. Department of Justice

G. Department of Labor

H. Department of Veterans Affairs

I. Department of Health and Human Services

V. General Certifications

VI. Final Regulations

I. Background

On December 12, 2002, President George W. Bush signed Executive Order 13279, Equal Protection of the Laws for Faith-Based and Community Organizations (67 FR 77141), available at

https://www.gpo.gov/fdsys/pkg/FR-2002-12-16/pdf/02-31831.pdf

. Executive Order 13279 set forth principles and policymaking criteria to guide Federal agencies in formulating and developing policies with implications for faith-based and other community organizations, to ensure equal protection of the laws for these organizations, and to expand opportunities for, and strengthen the capacity of, these organizations to meet the need for social services in America's communities. In addition, Executive Order 13279 directed specified agency heads to review and evaluate existing policies relating to Federal financial assistance for social service programs and, where appropriate, to implement new policies that were consistent with, and necessary to further, the fundamental principles and policymaking criteria established under Executive Order 13279.

To comply with this Executive order, most of the Agencies participating in this joint final rule amended their regulations to clarify that faith-based or religious organizations (faith-based organizations) are eligible to participate in programs administered by each Agency on the same basis as any other private organization. Some of the participating Agencies also had regulations predating the regulations implementing Executive Order 13279 that generally prohibited organizations from using Federal funds to support religious activities. See,

e.g.,

34 CFR 75.532, 76.532 (ED).

Shortly after taking office, on February 5, 2009, President Barack Obama signed Executive Order 13498, Amendments to Executive Order 13199 and Establishment of the President's Advisory Council for Faith-Based and Neighborhood Partnerships (74 FR 6533), available at https://www.gpo.gov/fdsys/pkg/FR-2009-02-09/pdf/E9-2893.pdf. Executive Order 13498 changed the name of the White House Office of Faith-Based and Community Initiatives to the White House Office of Faith-Based and Neighborhood Partnerships and established the President's Advisory Council on Faith-Based and Neighborhood Partnerships (Advisory Council). The President created the Advisory Council to bring together experts to, among other things, make recommendations to the President for changes in policies, programs, and practices that affect the delivery of services by faith-based and other neighborhood organizations.

The Advisory Council issued its recommendations in a report to the President in March 2010 entitled

President's Advisory Council on Faith-Based and Neighborhood Partnerships, A New Era of Partnerships: Report of Recommendations to the President

(Mar. 2010), available at

http://www.whitehouse.gov/sites/default/files/microsites/ofbnp-council-final-report.pdf

(“Advisory Council Report”). The Advisory Council Report included recommendations to amend Executive Order 13279 in order to clarify the legal foundation of partnerships between the Federal Government and faith-based and other neighborhood organizations and offered a new set of fundamental principles to guide agency decisionmaking in administering Federal financial assistance and support

to faith-based and other neighborhood organizations.

President Obama signed Executive Order 13559, Fundamental Principles and Policymaking Criteria for Partnerships With Faith-Based and Other Neighborhood Organizations, on November 17, 2010, 75 FR 71319, available at

http://www.gpo.gov/fdsys/pkg/FR-2010-11-22/pdf/2010-29579.pdf.

Executive Order 13559 incorporated some of the Advisory Council's recommendations by amending Executive Order 13279 to:

• Require agencies that administer or award Federal financial assistance for social service programs to implement protections for the beneficiaries or prospective beneficiaries of those programs. These protections include: (1) Ensuring that written notice of the Executive order's provisions

is provided to beneficiaries before they enroll in, or receive services under, a program, and (2) requiring that organizations providing services under a program provide referrals to alternative providers if the beneficiary objects to the religious character of the organization providing services;

When this final rulemaking notice refers to “the Executive order” without distinction, it means Executive Order 13279, as amended by Executive Order 13559.

• Affirm that decisions about awards of Federal financial assistance must be free from political interference or even the appearance of such interference, and must be made on the basis of merit, not on the basis of the religious affiliation, or lack thereof, of the recipient organization;

• Affirm that the Federal Government has an obligation to monitor and enforce standards regarding the relationship between religion and government in ways that avoid excessive entanglement between religious bodies and governmental entities;

• Clarify (1) the principle that organizations engaging in explicitly religious activities must separate these activities in time or location from programs supported with direct Federal financial assistance (Executive Order 13279 stated this requirement as applying to “inherently religious” activities); (2) that such activities cannot be subsidized with direct Federal financial assistance; and (3) that participation in those activities must be voluntary for the beneficiaries of the social service program supported with direct Federal financial assistance;

• Emphasize that faith-based providers are eligible to compete for assistance under Federal Government social service programs and to participate in those programs while maintaining their religious identity as described in the Executive order;

• Require agencies that provide Federal financial assistance for social service programs to post online the regulations, guidance documents, and policies that have implications for faith-based and other neighborhood organizations, as well as a list of entities receiving that assistance; and

• Clarify that the Executive order principles apply to sub-awards as well as to prime awards.

In addition, Executive Order 13559 created the Interagency Working Group on Faith-Based and Other Neighborhood Partnerships (Working Group) to review and evaluate existing agency regulations, guidance documents, and policies for consistency with the Executive order, and to submit a report to the President recommending the amendments, changes, or additions necessary to ensure that regulations and guidance documents associated with the distribution of Federal financial assistance for social service programs are consistent with the fundamental principles set forth in the Executive order. The Executive order mandated that this report include a model set of regulations and guidance documents for the Agencies to adopt in a number of areas, including, among other things, prohibited uses of direct Federal financial assistance and separation requirements, protections for religious identity, the distinction between “direct” and “indirect” Federal financial assistance, and protections for beneficiaries of social service programs.

The Executive order required that, following receipt of the Working Group's report, the Office of Management and Budget (OMB), in coordination with the U.S. Department of Justice, issue guidance to agencies on the implementation of the Executive order. In August 2013, OMB issued that guidance consistent with the model regulations and guidance issued by the Working Group. Memorandum for the Heads of Executive Departments and Agencies, from Sylvia M. Burwell, Director, Office of Management and Budget,

Re: Implementation of Executive Order 13559, “Fundamental Principles and Policymaking Criteria for Partnerships With Faith-Based and Other Neighborhood Organizations

” (Aug. 2, 2013), available at

https://www.whitehouse.gov/sites/default/files/omb/memoranda/2013/m-13-19.pdf.

The OMB guidance also stated that participating agency heads must amend regulations and guidance to ensure that such regulations and guidance are consistent with the fundamental principles stated in the Executive order. Id. at 2. As noted above, on August 6, 2015, the Agencies published proposed regulations consistent with this OMB guidance. Following receipt and consideration of public comments, the Agencies now issue these final regulations. Consistent with the principle of uniformity expressed in section 3 of the Executive order, the Agencies agreed that these final regulations need to provide uniform direction on matters regarding the fundamental principles set forth in section 2 of the Executive order to the extent practicable.

In addition to these final regulations, each Agency will provide policy guidance or reference materials to assist recipients

of Federal financial assistance in complying with these final regulations. While these regulations become effective 30 days after publication in the

Federal Register

, the Agencies have decided to delay the date by which recipients of Federal financial assistance must comply with these final regulations until July 5, 2016 to ensure that recipients of Federal financial assistance fully understand their obligations under these final regulations.

Unless otherwise provided, recipients subject to these final regulations include recipients of an award of Federal financial assistance made on or after May 4, 2016. However, applicability of these final regulations to existing awards of Federal financial assistance shall be in accordance with the terms and conditions of the award.

For the purposes of this preamble, the terms “recipient” and “grantee” and the terms “subrecipient” and “subgrantee” are synonymous. Depending on context, “recipients” may also include subrecipients.

Some of the Agencies have existing regulations that are not affected by the delayed compliance date.

II. These Final Regulations

These final regulations are effective on May 4, 2016. Recipients must comply with these final regulations by July 5, 2016. Note: If a recipient receives a new or continuation (renewal) award before the effective date, in most cases that award will not be subject to these final regulations and, therefore, the recipient will not have to comply with the regulations on or after the compliance date. However, some awards made before the effective date of these regulations may contain conditions that would make these regulations apply. Recipients that have awards subject to these conditions would have to comply with the final regulations on the compliance date

despite the fact that their awards were made before the effective date.

Unless otherwise specified in an agency-specific part of this preamble,

these final regulations amend existing regulations or establish new regulations to do the following:

Some of the Agencies have special features in their regulations or depart from the consensus approach described in the joint preamble. To the extent that an Agency departs from the joint preamble, the decision is explained in part IV of this preamble, which contains the discussion of agency-specific issues.

• Require the Agencies to ensure that all decisions about Federal financial assistance to recipient organizations are free from political interference, or even the appearance of such interference, and are based on merit, not based on the organization's religious affiliation or lack thereof.

• Make clear that faith-based organizations are eligible to participate in the Agencies' social service programs on the same basis as any other private organization.

• Replace the term “inherently religious activities” with the term “explicitly religious activities” in existing regulations, or establish “explicitly religious” in new regulations as the basis for determining which activities cannot be supported with direct Federal financial assistance.

• Make clear that all organizations that receive Federal financial assistance are prohibited from discriminating against beneficiaries in the provision of program services based on religion, a religious belief, a refusal to hold a religious belief, or a refusal to attend or participate in a religious practice, while also noting that organizations that participate in programs funded by indirect financial assistance need not modify their program activities to accommodate beneficiaries who choose to expend the indirect aid on those organizations' programs.

• Distinguish between “direct” and “indirect” Federal financial assistance.

• Require faith-based organizations that receive direct Federal financial assistance under a domestic social service program to provide written notice of certain protections to beneficiaries of the program. Specifically, an organization that receives direct Federal financial assistance, as defined in these final regulations, is required to give notice to beneficiaries that—

(1) The organization may not discriminate against a beneficiary based on religion, a religious belief, a refusal to hold a religious belief, or a refusal to attend or participate in a religious practice;

(2) The organization may not require a beneficiary to attend or participate in any explicitly religious activities that are offered by the organization, and any participation by the beneficiaries in those activities must be purely voluntary;

(3) The organization must separate in time or location any privately funded explicitly religious activities from activities supported by direct Federal financial assistance;

(4) If a beneficiary or prospective beneficiary objects to the religious character of the organization, the organization will undertake reasonable efforts to identify and refer the beneficiary to an alternative provider to which the beneficiary does not object; and

(5) A beneficiary or prospective beneficiary may report violations of these protections, including any denials of services or benefits, to the Federal agency or intermediary administering the program.

After any such allegations are made, they will be examined by the Federal agency or intermediary administering the program.

• To account for unique circumstances that could arise under some programs, provide that, when the nature of the service provided or exigent circumstances make it impracticable to provide the written notice in advance of the actual service, domestic service providers must advise beneficiaries of their protections at the earliest available opportunity.

• Require faith-based recipients of domestic direct social service program assistance to undertake reasonable efforts to identify an alternative provider, if a beneficiary or prospective beneficiary objects to the religious character of the faith-based organization, and to refer the beneficiary to an identified alternative provider.

• Make clear that a faith-based organization that provides services to a beneficiary supported only by “indirect Federal financial assistance” is not required to (1) provide written notice to beneficiaries, (2) make reasonable efforts to refer a beneficiary to an alternative provider if the beneficiary objects to the religious character of the faith-based provider, or (3) separate explicitly religious activities in time or location from programs supported with indirect Federal financial assistance.

These clarifications are consistent with

Zelman

Simmons-Harris,

536 U.S. 639, 652-53 (2002), discussed in part III.B below.

III. Cross-Cutting Public Comments

The major cross-cutting issues that were raised in the comments are discussed in this part III of the preamble. Many commenters filed similar or identical comments with all the Agencies. Thus, unless otherwise noted in response to a particular comment, the responses in this part are adopted by the Agencies, regardless of whether a particular Agency received a particular comment. This preamble does not discuss editorial suggestions made by the commenters.

The Agencies note that, after each discussion of a comment, there are two headings: “Change” and “Affected regulations.” Under the “Change” heading, the Agencies have tried to describe what types of changes have been made to the agency's proposed regulations in these final regulations as a result of the comment. Under the “Affected regulations” heading, the Agencies have sought to list only those sections of the final regulations that have been changed from the language in the NPRM as a result of the comment.

Some changes have been made to the proposed regulations in order to assure greater uniformity across Agencies in the final regulations, consistent with the fundamental principles described in section 2 of the Executive order. These uniformity changes are described in the agency-specific sections of part IV of this preamble. Also, comments that raised agency-specific issues or require explanation of how a cross-cutting issue affects certain agency-specific programs are addressed in part IV of this preamble.

A. Prohibited Use of Direct Federal Financial Assistance

1. “Explicitly Religious” Activities

Summary of comments:

Several commenters expressed support for the proposal to replace the term “inherently religious activities,” which appears in some Agencies' current regulations, with the term “explicitly religious activities” and to define that term to include activities that involve overt religious content such as worship, religious instruction, or proselytization. These commenters also suggested that the Agencies add language to the regulations that would further clarify which activities cannot be subsidized by direct Federal financial assistance or mixed with activities funded by such aid. Some commenters suggested that the regulations incorporate the Advisory Council's full explanation of the term “explicitly religious activities.”

In its report, the Advisory Council stated that the Government is prohibited from “directly subsidizing any explicitly religious activity, meaning any activities that involve overt religious content. Thus, direct Federal aid should not be used to pay for activities such as religious instruction,

devotional exercises, worship, proselytizing or evangelism; production or dissemination of devotional guides or other religious materials; or counseling in which counselors introduce religious content. Similarly, grant or contract funds may not be used to pay for equipment or supplies to the extent they are allocated to such activities.” Advisory Council Report at 129-30 (footnotes omitted).

Also, several commenters suggested that more of the Agencies should include language in their regulations that is similar to language in DOJ's current regulations, which state that faith-based organizations should not be disqualified from receiving Federal financial assistance due to their religious motivation, influence, character, or affiliation. See existing regulations at 28 CFR 38.1(e).

Response:

The Agencies are satisfied that the definition for “explicitly religious activities” set forth in the proposed regulations is the most appropriate one for regulatory text. It fairly describes the scope of the defined activities, while still being concise and uniform across the Agencies. The Agencies note that this regulatory definition includes key language from the Advisory Council's report and is grounded in relevant Supreme Court precedents such as

Hunt

McNair,

413 U.S. 734, 744-45 (1973) (finding no constitutional violation where a State project-financing program excluded facilities used for sectarian instruction or religious worship, and facilities used primarily by a school or department of divinity, from the scope of the program), and

Locke

Davey,

540 U.S. 712, 725 (2004) (finding that State had “historic and substantial” interest in denying funds for “vocational religious instruction,” even as part of indirect aid program).

The Agencies recognize that the meaning of “explicitly religious” is central to many provisions of the regulations, but they believe that the term's meaning is best conveyed by reference to program-specific examples. Accordingly, the Agencies anticipate providing additional policy guidance or reference materials to recipients and to the public. For example, to the extent that particular direct aid programs involve counseling, the Agency will note in policy guidance or reference materials that counselors may not encourage beneficiaries to accept religious teachings or discourage them from doing so.

The Agencies also find it unnecessary to include additional language stating that faith-based organizations should not be disqualified from receiving Federal financial assistance due to their religious motivation, influence, character, or affiliation. In its proposed regulations, DOJ included language on this issue in the context of restating all of its current regulations on partnerships with faith-based and other neighborhood organizations in addition to the regulations it proposed to add or alter as part of this rulemaking. 80 FR at 47324 (proposed 28 CFR 38.5(d)). DOJ's current regulations state that faith-based organizations should not be disqualified from receiving Federal financial assistance due to their religious motivation, influence, character, or affiliation. 28 CFR 38.1(e). In addition, HHS's proposed regulations combined its existing regulations on faith-based and other neighborhood organizations that had been in separate sections (one addressing discretionary grants and another discussing formula and block grants) into one entirely new part that addresses all grants. Thus, HHS's current and proposed regulations state that organizations may not be disqualified from participating in the HHS awarding agency's programs because the organizations “are motivated or influenced by religious faith to provide social services, or because of their religious character or affiliation.” 28 CFR 87.1(f) (current); 80 FR at 47280 (proposed 45 CFR 87.3(e)). DHS does not have current regulations regarding these partnerships, so DHS included this concept in its proposed regulations. 80 FR at 47297 (proposed 19 CFR 19.3(e)). ED, USDA, USAID, HUD, DOL, and VA have similar current regulations, but did not restate those regulations as a part of this rulemaking. In sum, Agencies other than DHS already have such language in their current regulations, and DHS is making minor changes to better align with the other Agencies to ensure that religious organizations may seek assistance without discrimination based on the organization's religious character, affiliation, influence, or motivation. See final regulations at 6 CFR 19.3(e) (DHS); 7 CFR 16.3(a) (USDA); 22 CFR 205.1(f) (USAID); 24 CFR 5.109(c) (HUD); 28 CFR 38.5(d) (DOJ); 29 CFR 2.32(c) (DOL); 34 CFR 75.52(a)(2), 76.52(a)(2) (ED); 38 CFR 62.62(a) (VA); 45 CFR 87.3(a), (e) (HHS).

Change:

DHS has made a minor change to align with the other Agencies.

Affected regulations:

6 CFR 19.3(e) (DHS).

2. Chaplaincy

Summary of comments:

Some commenters supported the proposed regulatory language of several Agencies noting that chaplaincy services are not “explicitly religious activities” subject to direct Federal financial assistance restrictions. See,

e.g.,

proposed regulations at 80 FR at 47323 (28 CFR 38.2(b)) (DOJ). These commenters also urged other agencies, such as HUD and ED, to include similar language in their final regulations. Another commenter objected to the proposed regulatory language—

i.e.,

that “services that can be publicly funded under the Establishment Clause, such as chaplaincy services, . . . would not be considered explicitly religious activities that are subject to direct financial aid restrictions”—on the ground that this language was broad and vague.

Other commenters objected to regulatory language providing more generally that “[r]eligious activities that can be publicly funded under the Establishment Clause” are also excluded from the definition of “explicitly religious activities.” See,

e.g.,

proposed regulations at 80 FR at 47323 (28 CFR 38.2(b)) (DOJ). These commenters contended that this language was too broad and ambiguous. These commenters said that “[t]he instances in which the providers may include explicitly religious activities” in programs funded by direct aid “are extremely rare” and limited to situations in which “the government facilitates the private and voluntary religious practices of individuals, on a denominational-neutral basis, because those individuals lack access to their own religious community due to the action of government or being in government custody,

e.g.,

the individual is in the military, imprisoned, or confined to a government-funded hospital.” Accordingly, these commenters requested that the Agencies “more accurately explain this very limited exception.”

Response:

The Agencies agree that direct Federal funding for religious activities is constitutionally permissible and necessary under limited circumstances, such as for chaplaincy services. For example, chaplaincy services are offered to beneficiaries such as students in rural training camps or inmates in prison who may otherwise be unable to freely access religious services by virtue of the location of their program or a limitation on their freedom of movement.

See Cruz

Beto,

405 U.S. 319, 322 n.2 (1972) (per curiam) (all prisoners must be given reasonable opportunities to exercise their First and Fourteenth Amendment religious freedoms without fear of penalty);

Katcoff

Marsh,

755 F.2d 223, 234 (2d Cir. 1985) (First Amendment requires government to make religion available to soldiers deployed to locations where their own religious denominations are not available to them). The Agencies

agree that not all of the proposed regulations addressed the exclusion of services that can be publicly funded consistent with the Establishment Clause, such as chaplaincy services. However, the Agencies also believe that they should retain whatever discretion is afforded them under applicable Federal law to fund, or not to fund, other such activities that can be publicly funded consistent with the Establishment Clause, while following any prohibitions against funding such activities consistent with their funding statutes. The intention of this rulemaking is not to disturb this practice. The Agencies agree that the proposed regulations did not all provide sufficient clarity in this regard.

Change:

The Agencies affected by these comments (DHS, USAID, DOJ, VA and HHS) accordingly have made clear that their final regulations do not apply to explicitly religious activities that can be publicly funded consistent with the Establishment Clause, such as chaplaincy services. All the Agencies agree that whether such activities should be funded, and if so, whether they should be subject to restrictions such as the separation in time and location requirement, is to be left to the future determination of the Agencies on a case-by-case basis, based on applicable Federal law and the Agencies' discretion under that law to determine whether and under what conditions the expenditure is appropriate. These regulations do not displace this discretion.

Some of the Agencies participating in this final rulemaking must address these comments differently because they do not have any chaplaincy programs or language about chaplaincy in their current rules (ED, HUD, USDA) or because they are not changing their current language on the subject (DOL). Those Agencies will explain the basis for their different approaches in the agency-specific preambles following this joint preamble.

Affected regulations:

6 CFR 19.4(e) (DHS); 22 CFR 205.1(b) (USAID); 28 CFR 38.2(b)-(c), 38.5(a) (DOJ); 38 CFR 50.1(a) (VA); 45 CFR 87.3(b) (HHS).

3. Nondiscrimination and Programs Funded in Part by Federal Financial Assistance

Summary of comments:

Some commenters suggested that the Agencies' proposed regulations should be amended to clarify that the nondiscrimination provisions apply to programs whether they are completely or only partially funded by Federal financial assistance.

Response:

This clarification is not necessary as the regulations generally state that programs “supported” with Federal financial assistance are subject to the regulations—language that encompasses programs funded partially by Federal financial assistance. In addition, the language regarding funding “in whole or in part” is already contained in the model written notice of beneficiary rights (adopted by all of the Agencies except USAID), which begins (with some minor variation across Agencies), “Because this program is supported

in whole or in part

[emphasis added] by financial assistance from the [Federal Government or Agency], we are required to let you know that” beneficiaries have the following rights. See final regulations at 6 CFR part 19, appendix A (DHS); 7 CFR part 16, appendix A (USDA); 28 CFR part 38, appendix A (DOJ); 29 CFR 2.39, appendix A (DOL); 34 CFR part 75, appendix A (ED). Some agencies have not included the notice in their final regulations. Instead, these agencies have included the notice as appendices to this final rulemaking. See appendix E (HUD); appendix H (VA); appendix I (HHS).

The appendices at the end of this document appear after the signatures of the responsible agency officials and are designated so that each appendix designation corresponds to the designation of that agency's section of the preamble in part IV. For example, HUD's agency-specific preamble appears in part IV.E, and its appendix is designated as appendix E.

Change:

None.

Affected regulations:

None.

B. Direct and Indirect Federal Financial Assistance

USAID does not fund programs involving indirect Federal financial assistance, as that term is used within these final regulations. Therefore “the Agencies,” as used in this part III.B of the preamble, does not include USAID.

Summary of comments:

The Agencies received several comments regarding the relationship between indirect financial assistance, beneficiary protections, and participation in indirectly funded programs that permissibly include religious content. Many commenters took the position that faith-based organizations should not be able to turn away prospective beneficiaries on the basis of religion. Some commenters requested that the regulations make clear that participants in programs funded only by indirect Federal financial assistance could be required to take part in religious activities related to the program as a condition of participation. These commenters suggested that, once a beneficiary chooses a religious program from a range of options that includes an adequate secular alternative, it would not be discriminatory for the organization to require the beneficiary to participate in the religious aspects of the program. Additionally, one of these commenters requested that several Agencies clarify that programs funded by indirect assistance need not be separated in time or location from programs or activities with explicit religious content. Other commenters requested that the Agencies apply the prohibitions on discrimination against beneficiaries equally to indirect and direct aid programs, with the consequence that programs funded by indirect aid would not be able to impose a requirement of participation in religious activities within a program. These commenters stated that applying the nondiscrimination prohibitions to indirect as well as direct aid better reflected the text and intent of Executive Order 13559.

Commenters with a variety of perspectives on these issues noted opportunities for revising various provisions of the regulations to reflect their positions, whether by inserting language more sharply differentiating the regulations applicable to direct and indirect Federal financial assistance, or by removing language in some current and proposed regulations that did differentiate them. Some commenters also urged that the definition of “indirect Federal financial assistance” be revised to better reflect requirements for “true private choice” as set forth in

Zelman

Simmons-Harris,

536 U.S. 639, 653-54 (2002).

Response:

As some of the commenters noted, the text of section 2(d) of the Executive order does not limit beneficiary nondiscrimination obligations to direct aid programs. Most Agencies, in the preambles to their individual notices of proposed rulemaking, did not distinguish between discrimination against beneficiaries under indirect and direct aid programs for purposes of beneficiary admissions. They also included language to the effect that the Executive order made it clear that all organizations that receive Federal financial assistance for the purpose of delivering social welfare services are prohibited from discriminating against beneficiaries or potential beneficiaries of those programs on the basis of religion, a religious belief, a refusal to hold a religious belief, or a refusal to attend or participate in a religious practice. See proposed regulations at 80 FR at 47246 (USDA); 80 FR at 47258 (ED); 80 FR at 47275 (HHS); 80 FR at 47288 (DHS); 80 FR at 47319 (DOJ); 80 FR at 47332 (DOL); 80 FR at 47343 (VA). By contrast,

HUD did not address this matter in its preamble.

As commenters noted, however, there was considerable variation in the way the Agencies addressed this issue in their proposed regulations. Some Agencies (DHS and DOJ) would have limited nondiscrimination obligations to recipients of direct aid. See proposed regulations at 80 FR at 47298 (6 CFR 19.5) (DHS); 80 FR at 47324 (28 CFR 38.5(c)) (DOJ). Other Agencies (HUD and HHS) would have expressly made these nondiscrimination obligations apply to all programs funded by Federal financial assistance, which would include both direct and any indirect aid programs. See proposed regulations at 80 FR at 47311 (24 CFR 5.109(h)) (HUD); 80 FR at 47280 (45 CFR 87.3(d)) (HHS). ED's proposed regulations did not address this issue because ED has existing regulations that prohibit religious discrimination by recipients of grants and subgrants awarded under ED programs (see existing regulations at 34 CFR 75.52(e), 76.52(e)), and the only indirect aid program it manages is subject to specific statutory provisions that prohibit religious discrimination against beneficiaries.

Although some Agencies (DOL, USDA, and VA) have existing regulations that would appear to limit nondiscrimination obligations to recipients of direct aid, those Agencies did not describe in their NPRMs how this issue is addressed under their current regulations. See existing regulations at 7 CFR 16.3(a) (USDA); 29 CFR 2.33(a) (DOL); 38 CFR 62.62(e) (VA).

See Scholarships for Opportunity and Results Act, Public Law 112-10, div. C, § 3008, 125 Stat. 38, 204 (2011), which prohibits discrimination against beneficiaries on the basis of religion.

In responding to the comments and formulating final regulations, the Agencies focused on the value of achieving uniformity on this issue. Executive Order 13559 established the Interagency Working Group with the specific purpose of creating as much uniformity as possible in these regulations. Executive Order 13279, § 3, as amended by Executive Order 13559, § 1(c). Achieving greater uniformity on this issue will better serve providers and beneficiaries, especially those who are involved in programs administered by more than one agency, by avoiding subjecting them to inconsistent obligations.

The Agencies also focused on the fact that the text of section 2(d) of the Executive order does not limit these nondiscrimination obligations to direct aid programs. It states that all organizations that receive Federal financial assistance under social service programs should be prohibited from discriminating against beneficiaries or prospective beneficiaries of the social service programs on the basis of religion or religious belief. It also states that, in providing services supported in whole or in part with Federal financial assistance and in their outreach activities related to such services, no organizations should be allowed to discriminate against current or prospective program beneficiaries on the basis of religion, a religious belief, a refusal to hold a religious belief, or a refusal to attend or participate in a religious practice.

Moreover, by ensuring that beneficiaries and potential beneficiaries cannot be required to even attend or in any way participate in a religious practice, Executive Order 13559 strengthened the nondiscrimination requirements previously in place in several respects. Compare Executive Order 13279, § 2(d), 67 FR at 77142 (organizations should not be allowed to discriminate against current or prospective beneficiaries on the basis of “a refusal to actively participate in a religious practice”), with Executive Order 13279, § 2(d), as amended by Executive Order 13559, 75 FR at 71320 (organizations should not be allowed to discriminate against current or prospective beneficiaries based on “a refusal to attend or participate in a religious practice”).

Additionally, the Agencies focused on the potential implications of the various approaches urged in the comments. In particular, the Agencies focused on the potential implications of maintaining the current regulations of some of the Agencies, which would seemingly allow providers to turn away indirect aid beneficiaries on the basis of religion or religious beliefs or lack thereof. Such an outcome seems inconsistent with a key policy goal articulated by Executive Order 13559—strengthening religious liberty protections for beneficiaries. It also seems inconsistent with the views of many of the commenters.

In light of these considerations, the final regulations closely track the Executive order and are uniform across the Agencies. Specifically, the final regulations of each Agency state that any organization that participates in a program funded by Federal financial assistance shall not, in providing services or in outreach activities related to such services, discriminate against a program beneficiary or prospective program beneficiary on the basis of religion, a religious belief, a refusal to hold a religious belief, or a refusal to attend or participate in a religious practice. See final regulations at 6 CFR 19.5 (DHS); 7 CFR 16.4(a) (USDA); 24 CFR 5.109(h) (HUD); 28 CFR 38.5(c) (DOJ); 29 CFR 2.33(a) (DOL); 2 CFR 3474.15(f), 34 CFR 75.52(e), 76.52(e) (ED); 38 CFR 50.1(f), 61.64(a), 62.62(a) (VA); 45 CFR 87.3(d) (HHS). At the same time, the final regulations provide that an organization that participates in a program funded by indirect financial assistance need not modify its program activities to accommodate a beneficiary who chooses to expend the indirect aid on the organization's program. See final regulations at 2 CFR 3474.15(f), 34 CFR 75.52(e), 76.52(e) (ED); 6 CFR 19.5 (DHS); 7 CFR 16.4(a) (USDA); 24 CFR 5.109(h) (HUD); 28 CFR 38.5(c) (DOJ); 29 CFR 2.33(a) (DOL); 38 CFR 50.1(f) (VA); 45 CFR 87.3(d) (HHS).

For example, a faith-based organization receiving indirect aid that offers a Bible study as part of its programming need not remove that study from its program activities or create alternative programming for an indirect aid beneficiary who does not wish to participate in the Bible study. Faith-based organizations offering for sale food that is compliant with a particular religious diet could take a form of indirect assistance as payment for that food without also offering food that is compliant with some other religious diet. And a substance abuse recovery program, like a 12-step program, that includes religious content that is integral to the program would not be required to alter its program to accommodate an objector who pays for the program with indirect aid.

Finally, the Agencies note that the definition of “indirect financial assistance” aligns with the constitutional principles addressed in

Zelman

Simmons-Harris,

536 U.S. 639 (2002), and believe that the framework set out in

Zelman

further supports the Agencies' decision with respect to nondiscrimination against beneficiaries of indirect assistance. In

Zelman,

the Supreme Court reasoned that the State school voucher program at issue did not offend the Establishment Clause because, among other things, the program placed the benefit in the hands of individuals, who in turn had the freedom to choose the school to which they took their benefit and “spent” it, whether that school was public or private, nonreligious or religious. Id. at 652-53. In those circumstances, the Court explained, the government cannot be understood to advance or endorse any explicitly religious programs that may be among the options available to beneficiaries. Id. It bears note that the voucher scheme at issue in

Zelman,

which was described by the Court as a

program of “true private choice,” was neutral toward religion and offered beneficiaries adequate secular options.

Id.

at 653, 655-56. Accordingly, the Agencies included these criteria in the proposed definition of “indirect financial assistance.” As also noted in those Agencies' final regulations, “indirect” Federal financial assistance places the choice of service provider in the hands of a beneficiary before the Government pays for the cost of that service through a voucher, certificate, or other similar means. See final regulations at 6 CFR 19.2 (DHS); 7 CFR 16.2(b)(1) (USDA); 24 CFR 5.109(b) (HUD); 28 CFR 38.3(b) (DOJ); 29 CFR 2.31(a)(2) (DOL); 34 CFR 75.52(c)(3)(ii), 76.52(c)(3)(ii) (ED); 38 CFR 50.1(b)(3) (VA); 45 CFR 87.1(c) (HHS). In these cases, the Government empowers beneficiaries to choose for themselves whether to receive the needed services from an entity that incorporates explicitly religious activities into federally supported programs or an entity that does not do so. Notably, the voucher program upheld in

Zelman

required participating private schools to “agree not to discriminate on the basis of race, religion, or ethnic background.” 536 U.S. at 645.

Change:

Agencies that had differentiated between direct and indirect assistance with respect to nondiscrimination obligations have removed that distinction in their final regulations. The Agencies have also added language making clear that programs funded by indirect financial assistance need not modify those programs to accommodate a beneficiary. Where needed, the Agencies have added language making it clear that the separation in time or location requirement only applies to programs funded by direct assistance.

Affected regulations:

2 CFR 3474.15(f); 34 CFR 75.52(e), 76.52(e) (ED); 6 CFR 19.5 (DHS); 7 CFR 16.4(a) (USDA); 28 CFR 38.5(c), 38.8(a) (DOJ); 29 CFR 2.33(a) (DOL); 38 CFR 50.1(f) (VA); 45 CFR 87.3(d) (HHS).

C. Intermediaries

1. Compliance

Summary of comments:

Commenters recommended that the Agencies use comprehensive language that requires intermediaries to ensure that the recipients they select comply with the Executive order as well as any implementing regulations or guidance. Commenters also recommended that the Agencies adopt a provision proposed by DOJ that spells out the responsibilities of State or local governments or other organizations acting as intermediaries or pass-through recipients that provide subgrants to service providers (“intermediaries”) by requiring intermediaries to “give reasonable assurance[s] that [they] will comply with this [regulation] and effectively monitor the actions of [their] recipients.” See proposed regulations at 80 FR at 47325 (28 CFR 38.7(b)).

Response:

The Agencies require that intermediaries comply with these regulations and effectively monitor the actions of their recipients. This preamble and the final regulations of most of the Agencies clearly state that intermediaries must ensure that providers to which they disburse Federal financial assistance comply with the regulations. See final regulations at 6 CFR 19.2 (DHS); 7 CFR 16.2(c) (USDA); 24 CFR 5.109(f) (HUD); 28 CFR 38.3(c)(2) (DOJ); 29 CFR 2.33(c) (DOL); 34 CFR 75.714, 76.714 (ED); 38 CFR 50.1(e) (VA); 45 CFR 87.3(m), 1050.3(h) (HHS). As an example, subgrantee compliance could be ensured by the conditions included in the notice of the Federal award. However, to reflect the variety of programs with different reporting and monitoring requirements of each Agency, the Agencies individually will determine how the intermediary ensures subgrantee compliance.

Change:

The final regulations of each Agency (excluding USAID) provide that an intermediary given authority to select an organization to receive Federal financial assistance must ensure that the organization complies with these final regulations. Some of the Agencies participating in these final regulations will address this comment differently. Those Agencies that address this comment differently explain the basis for that differentiation in their agency-specific preambles following this joint preamble.

Affected regulations:

34 CFR 75.714, 76.52, 76.712-76.714 (ED); 38 CFR 50.1(e) (VA).

2. Comprehension of Requirements

Summary of comments:

To ensure that subrecipients understand they are subject to the same obligations as the non-government organization that receives a prime award, commenters recommended that the Agencies mirror USAID's explanatory information and regulatory language stating that receipt of Federal financial assistance includes a prime award or sub-award. See proposed regulations at 80 FR at 47240 (22 CFR 205.1) (USAID).

Response:

The Agencies believe that the final regulations are sufficiently explicit because the Agencies (other than USAID) first designate subgrantees as recipients of “direct Federal financial assistance” if the award is received through programs administered by States or other intermediaries that are themselves recipients of Federal financial assistance, and then describe the responsibilities of recipients of direct Federal financial assistance. See final regulations at 6 CFR 19.2 (DHS); 7 CFR 16.2(b)(2) (USDA); 24 CFR 5.109(b) (HUD); 28 CFR 38.3(a)(2) (DOJ); 29 CFR 2.31(a)(1), (a)(3) (DOL); 34 CFR 75.52(c)(3)(i), 76.52(c)(3)(i) (ED); 38 CFR 50.1(b)(1), (c) (VA); 45 CFR 87.1(b), (c)(2) (HHS). The regulations provide that these subrecipients are

not

considered recipients of indirect Federal financial assistance for purposes of the Executive order and the regulations. For example, ED has regulations governing faith-based and other neighborhood organizations that specifically impose requirements on both grantees and subgrantees, including the requirements in these final regulations. See final regulations at 34 CFR 76.52(c)(3)(i). The Agencies also believe that adding a parenthetical phrase such as “(including through a prime award or sub-award)” when referring to recipients of direct Federal financial assistance could be misinterpreted because not all Agencies use those terms in their regulations. Although USAID uses different language to ensure that recipients at all levels of assistance are subject to the requirements in these regulations, all of the Agency regulations concerning recipients of direct Federal financial assistance apply equally to recipients, subrecipients, and contractors of those entities that provide services under a program of Federal financial assistance. USAID's language provides additional clarity for its grantees because the term “direct financial assistance” is not defined or often used in USAID's regulations and standard award provisions. See final regulations at 22 CFR 205.1(b), (e), (f) (USAID).

Change:

None.

Affected regulations:

None.

D. Protections for Beneficiaries

USAID is not establishing requirements for written notices to beneficiaries or for referrals to alternative providers, for the reasons stated in its agency-specific preamble. Therefore “the Agencies,” as used in part III.D, does not include USAID.

1. Beneficiary Notice

a. Written Notice Requirement for Providers That Receive Indirect Federal Financial Assistance

Summary of comments:

Commenters requested that the Agencies change their proposed regulations to require that providers that receive indirect Federal

financial assistance provide written notice to beneficiaries in the same manner as providers that receive direct Federal financial assistance. Commenters asserted that there are protections for beneficiaries when accessing programs of providers that receive indirect Federal financial assistance, such as nondiscrimination against beneficiaries, and those beneficiaries would be unaware of such protections without a written notice. Commenters stated that a written notice would help protect the religious liberty rights of the clients and beneficiaries of all federally funded programs. One commenter noted that many lesbian, gay, bisexual, and transgender individuals have experienced discrimination and denial of services without being aware that they cannot be denied services because of a religious objection to their identity. Other commenters asserted the opposing view,

i.e.,

that the Agencies' proposed regulations do not clarify that providers in receipt of indirect Federal financial assistance are not subject to the nondiscrimination requirements set forth in Executive Order 13559 and that the Agencies' regulations should clarify that beneficiary protections such as nondiscrimination only apply when providers receive direct Federal financial assistance.

Response:

The Agencies decline to extend the written notice requirement to recipients of indirect Federal financial assistance. The Agencies interpret section 2(d) of the Executive order to apply the requirement of nondiscrimination in program admission and outreach to all Federal financial assistance (both direct and indirect), as previously stated in part III.B. However, the Agencies have decided not to change their regulations to require providers receiving indirect Federal financial assistance to provide a written notice of beneficiary protections. The Executive order requires written notice to a beneficiary of his or her right to seek a referral to another provider because the Government or an intermediary was the one to select the provider and award assistance to the provider or purchase services from that provider under a grant or subgrant. In contrast, indirect Federal financial assistance places the choice of provider in the hands of a beneficiary through a voucher, certificate, or other similar means before the Government pays for the services. In the case of indirect Federal financial assistance, because the beneficiary may use the voucher or other means to obtain services from a provider of their choice at the outset, providing a written notice to such a beneficiary to seek referral to another provider is unnecessary.

Also, the nature of certain indirect aid programs would make it extremely difficult to ensure that all beneficiaries receive a written notice. For example, there are more than a quarter million stores, farmers' markets, direct marketing farmers, homeless meal providers, treatment centers, group homes, and other participants across the nation that are authorized Supplemental Nutrition Assistance Program (SNAP) retailers. If providers receiving indirect aid were required to give written notice to beneficiaries, all of these retailers would have to have the notices ready at all times to provide to any person using SNAP benefits. While the Agencies decline to impose this requirement, they note that, in appropriate cases, they may encourage indirect aid recipients to inform beneficiaries of the protections provided under these regulations.

The Agencies also note that, while these regulations do not require written notice for indirect recipients of Federal financial assistance, there may be other applicable statutory or regulatory obligations that require recipients to notify beneficiaries that discrimination on the basis of religion is prohibited.

Change:

The response above clarifies that providers of indirect Federal financial assistance are not required to provide a written notice, and USDA and VA have amended their regulations accordingly. The remaining Agencies' final regulations are also clear on this point.

Affected regulations:

7 CFR 16.4(h) (USDA); 38 CFR 50.2(c) (VA).

b. Written Notice Language

Summary of comments:

Commenters requested that the Agencies change their proposed regulations to add language to the written notice requirement to clarify that providers may not discriminate against beneficiaries or potential beneficiaries based on “a refusal to hold a religious belief, or a refusal to attend or participate in a religious practice.” Commenters also recommended that the notice include a more expansive explanation of what constitutes explicitly religious activities. In addition, commenters requested that the written notice include specific mention of any services or information that providers refuse to provide due to religious or moral objections.

Response:

In addition to prohibiting discrimination on the basis of religion or religious belief, Executive Order 13559 amends Executive Order 13279 to state that providers must not discriminate against beneficiaries or prospective beneficiaries on the basis of “a refusal to hold a religious belief, or a refusal to attend or participate in a religious practice.” 75 FR at 71320. Although all relevant Agencies recognized in the preambles to their proposed regulations that a federally funded provider could not discriminate against a beneficiary or prospective beneficiary because of “a refusal to hold a religious belief, or a refusal to attend or participate in a religious practice,” the quoted language did not appear in all of the Agencies' proposed regulations.

The Agencies agree with the commenter that the quoted language should be included in Agencies' written notices. Further, the Agencies' regulations should similarly include this language. Regarding the request to provide a more specific explanation of what constitutes explicitly religious activities, the Agencies believe that the notice needs to remain more general because it must be provided across a broad array of programs. Adding more specificity could lead to confusion in the context of some programs. Therefore, the Agencies decline to include in the beneficiary notice a more expansive explanation or specific list of activities that are considered “explicitly religious.”

The Agencies also decline to require providers to specifically mention any services or information that the provider refuses to provide due to religious or moral objections. The Agencies believe that such issues are beyond the scope of the Executive order.

Change:

The Agencies' final regulations clarify the rights of beneficiaries by requiring that the notice to beneficiaries state explicitly that a federally funded provider may not discriminate against a beneficiary or prospective beneficiary because of “a refusal to hold a religious belief, or [a] refusal to attend or participate in a religious practice.”

Affected regulations:

6 CFR 19.5, 19.6(a)(1), 6 CFR part 19, appendix A (DHS); 7 CFR 16.4(f)(1)(i) (USDA); 24 CFR 5.109(g)(1)(i) (HUD); 28 CFR 38.6(c)(1)(i), 28 CFR part 38, appendix A (DOJ); 29 CFR 2.34(a)(1) (DOL); 34 CFR 75.712(a)(1), 34 CFR part 75, appendix A, paragraph (1), 34 CFR 76.712(a)(1) (ED); 38 CFR 50.2(a)(1) (VA); 45 CFR 87.3(i)(1)(i) (HHS).

c. Reporting Violations of the Protections in the Written Notice

Summary of comments:

Commenters recommended that the Agencies include DOJ's proposed reporting language in the required written notices; this

language stated that “[b]eneficiaries may report an organization's violation of these protections or file a written complaint of any denials of services or benefits by an organization with the Office for Civil Rights or the intermediary that awarded funds to the organization.” See proposed regulations at 80 FR at 47325 (28 CFR 38.6(c)(1)(v) (DOJ)). Most Agencies' proposed regulations and written notices provided that beneficiaries “may report violations of these protections” to the Agency, intermediary, or appropriate civil rights office but did not provide that beneficiaries could specifically file a written complaint to report denials of services or benefits. See proposed regulations at 80 FR at 47311 (24 CFR 5.109(g)(1)(v)) (HUD); 80 FR at 47337 (29 CFR 2.34(a)(5)) (DOL); 80 FR at 47251 (7 CFR 16.4(f)(1)(v)) (USDA); 80 FR at 47267, 47268 (34 CFR 75.712(a)(5), 76.712(a)(5)) (ED); 80 FR at 47281 (45 CFR 87.3(i)(1)(v)) (HHS); 80 FR at 47298 (6 CFR 19.6(a)(5)) (DHS); 80 FR at 47346 (38 CFR 50.2(a)(5)) (VA). Commenters also requested that the Agencies allow beneficiaries to report violations to more than one office, provide for reporting to both the Agency and intermediary, and designate an appropriate civil rights office to receive complaints.

Response:

The relevant Agencies agree with a majority of these commenters' concerns and provide in their final regulations that the written notice must make beneficiaries aware that they can report violations of these protections, including reports of any denials of services or benefits by organizations. In addition, some of the Agencies have chosen to designate their offices of civil rights as the proper offices to receive complaints. For instance, in its final regulations, DOL directs beneficiaries to file complaints with the Agency's Civil Rights Center. 29 CFR 2.34(a)(5). Some of the Agencies are not, however, designating their offices of civil rights to accept beneficiary complaints because the structure of those Agencies would not support such a designation. The Agencies will describe the reporting process in the agency-specific sections of this preamble based on the nature of each program and Agency.

Change:

All Agencies affected by these comments have amended the written notice requirements in their respective final regulations and their model written notices to indicate expressly that complaints regarding any denials of services or benefits may be filed with the relevant offices. DOJ has also made a non-substantive change to its written notice requirement for the sake of clarity.

Affected regulations:

2 CFR 3474.15(c)(1), 34 CFR 75.712(a)(5), 34 CFR part 75, appendix A, 34 CFR 76.712(a)(5) (ED); 6 CFR 19.6(a)(5), 6 CFR part 19, appendix A (DHS); 7 CFR 16.4(f)(1)(v) (USDA); 24 CFR 5.109(g)(1)(v) (HUD); 28 CFR 38.6(c)(1)(v) (DOJ); 29 CFR 2.34(a)(5) (DOL); 34 CFR 75.712(a)(5), appendix A to part 75, 76.712(a)(5); 38 CFR 50.2(a)(5) (VA); 45 CFR 87.3(i)(1)(v) (HHS).

d. Guarantee of Referral in the Written Notice

Summary of comments:

Commenters requested that the Agencies remove the phrase “[w]e cannot guarantee . . . that in every instance, an alternative provider will be available” from the model referral form, see,

e.g.,

proposed regulations at 80 FR at 47325 (28 CFR part 38, appendix A) (DOJ); 80 FR at 47337 (29 CFR 2.34(a)) (DOL), because commenters asserted that such language may deter beneficiaries from objecting to the religious character of providers and from seeking alternative providers.

Response:

The Agencies disagree with commenters that the phrase “we cannot guarantee that in every instance, an alternative provider will be available” should be removed from the referral form. Such a disclaimer statement is necessary in cases where, for example, the remote location of the services being provided may make such a promise impossible. The Agencies also disagree with the commenters' prediction that beneficiaries will be deterred from seeking alternative providers due to the lack of a guarantee of an alternate provider. Written notification of the ability to seek an alternative provider facilitates the opportunity to use an alternative provider when available. However, failure to acknowledge the potential lack of an alternative provider in the written notice could be misleading to a beneficiary. The Agencies have not made any changes based on these comments.

Change:

None.

Affected regulations:

None.

e. Accessibility of the Written Notice

Summary of comments:

Commenters suggested that the Agencies change their proposed regulations to require providers to translate the written notice into languages other than English for individuals with limited English proficiency (LEP), and to provide the written notice in accessible formats for individuals with disabilities. One commenter noted that ED's proposed regulations included language in the preamble authorizing “grantees, subgrantees, and contractors . . . to translate the notice into other languages and formats to communicate with the entire population of beneficiaries.” See 80 FR at 47258.

Response:

The Agencies agree that providers that receive Federal financial assistance, as defined by the Agencies' final regulations, have a responsibility to take reasonable steps to ensure for individuals with LEP meaningful access to their programs and activities in accordance with Title VI of the Civil Rights Act of 1964, 42 U.S.C. 2000d through 2000d-7, and Executive Order 13166, Improving Access to Services for Persons With Limited English Proficiency, 65 FR 50121, Aug. 11, 2000, as applicable.

Providing meaningful access for persons with LEP may entail providing language assistance services, including oral interpretation and written translation. Furthermore, the Agencies agree that providers receiving Federal financial assistance, as defined by the Agencies' regulations, have a responsibility to prohibit discrimination against individuals with disabilities and to ensure effective communication with individuals with disabilities, in accordance with section 504 of the Rehabilitation Act of 1973, 29 U.S.C. 794, and the Americans with Disabilities Act, 42 U.S.C. 12101

et seq.,

as applicable. However, these requirements have not been included in these final regulations because other regulations or guidance already impose them.

Note that the definition of Federal financial assistance under these final regulations is broader in scope than the definition under title VI of the Civil Rights Act of 1964 and several other nondiscrimination authorities. Compare Executive Order 13279, § 1(a), with,

e.g.,

28 CFR 42.102(c). Accordingly, some organizations that will be covered by these regulations will not be covered by title VI, most notably recipients of procurement contracts from the Agencies. Those organizations that fall outside the coverage of title VI may still have obligations to take reasonable steps to provide meaningful access to persons with LEP through implementation of Executive Order 13166, which imposes parallel language access requirements on federal agencies and their federally conducted programs and activities. See Executive Order 13166.

Federal laws prohibiting discrimination on the basis of disability require, in pertinent part, provision of program access, necessary auxiliary aids and services, physical access, and reasonable modification and accommodations to policies, practices, and procedures for persons with disabilities. See,

e.g.,

existing regulations at 24 CFR parts 8 and 9 (HUD); 28 CFR parts 35 and 36 (DOJ); 34 CFR part 104 (ED). Recipients may contact their awarding Agencies for technical assistance on fulfilling their

obligations to take reasonable steps to provide meaningful access for persons with LEP and to ensure effective communication with persons with disabilities. In fulfilling these obligations, recipients may be required to provide the written notice to beneficiaries in other languages and in accessible formats. The Agencies decline, therefore, to include in these final regulations the requirements described above because existing nondiscrimination authorities already cover those requirements.

Change:

None.

Affected regulations:

None.

f. Services Not Provided and Prioritization of the Written Notice

Summary of comments:

One commenter requested that the Agencies change their proposed regulations to require providers that receive direct Federal financial assistance to provide beneficiaries with a list of services that are not being offered if such providers refuse to offer those services due to religious or moral objections, as well as instructions about how to access the covered services from an alternative provider. This commenter also suggested that, “[i]n prioritizing when the highest notice standards should be implemented, the Departments should focus on those grantees that do not provide, due to religious or moral objection, specific services that beneficiaries are entitled to under any given program.”

Response:

The relevant Agencies believe that requiring providers to provide a list of the particular services that the provider offers and treating providers that do not offer certain services due to religious or moral objections differently is beyond the scope of Executive Order 13559. The Agencies, therefore, have not made any changes to the proposed regulations based on these comments.

Change:

None.

Affected regulations:

None.

g. Written Notice and Referral Forms

Summary of comments:

Some of the Agencies' proposed regulations included a section that contained model written notice and referral forms. Commenters suggested that content appearing in some of the model forms, namely, a section designated as “for staff use only,” see,

e.g.,

proposed regulations at 80 FR at 47312-13 (HUD), should appear on a separate page rather than on the form that is given to beneficiaries. The commenters' concern was that the “for staff use only” language, which included a space for staff to indicate whether a referral is or is not provided, may suggest to the beneficiaries that their requests for an alternative provider may be denied, which could make beneficiaries less likely to request an alternative provider. Commenters also suggested that the Agencies incorporate the written notice and referral forms into the regulatory text.

Response:

The Agencies have set forth in the regulations minimum requirements for what must be in the written notice. For some Agencies, the written notice and referral forms provided in their proposed regulations were merely samples. See,

e.g.,

proposed regulations at 80 FR at 47247 (USDA); 80 FR at 47279 (HHS). For DOL and ED, the written notice and referral forms were required as part of their proposed rules and continue to be so required in these final regulations. See final regulations at 29 CFR 2.34(a)(5), 29 CFR part 2, subpart D, appendices A and B (DOL); 34 CFR 75.712(c), 34 CFR part 75, appendix A, 34 CFR 76.712(c) (ED). While the other Agencies decline to require specific written notice and referral forms as part of their regulations, all Agencies include model written notice and referral forms either as appendices to their regulations (see final regulations at 6 CFR part 19, appendix A (DHS); 7 CFR part 16, appendix A (USDA); 28 CFR part 38, appendices A and B (DOJ)) or as appendices to this joint final rulemaking (HUD, VA, HHS). Those Agencies that have not included a model written notice or referral form as part of their regulations have determined that such model forms are unnecessary as providers have the option of including the notifications required under these regulations with other notifications that providers are already required to provide under applicable statutes and other regulations. It is important to note that any Agency's future changes to its written notice and referral forms will have to comply with the regulations and the Paperwork Reduction Act.

The Agencies that have included a “for staff use only” section in their model forms (USDA and HUD) do not believe that including this section on the same page as the notice will impact beneficiaries' actions or will deter beneficiaries from requesting an alternative provider. Moreover, because those Agencies included the written forms only as a model, moving the “for staff use only” section is unnecessary because providers can include other formats as the commenters requested.

Change:

DOL has moved the written notice and referral forms from the body of its proposed regulations to the appendices of its final regulations, but it has not made substantive changes based on this comment.

Affected regulations:

None.

h. Burden of Written Notice

Summary of comments:

Some commenters asserted that the written notice requirement is burdensome for religious organizations. For example, commenters stated that, “[t]he ramifications of implementing Executive Order 13559 by means of the proposed new rules would be to inevitably diminish the ability of the faith-based community and other neighborhood organization[s] to carry out their intended purposes of providing services to those in need in a timely and efficient manner.”

Response:

The Executive order requires that each beneficiary receive “written notice of the protections set forth” in the order. Executive Order 13559, § 1(b), amending Executive Order 13279, § 2(h)(ii)(5), 75 FR at 71321. The Agencies have implemented that requirement in a manner designed to limit the burden on recipients of direct Federal financial assistance and justified by the value to beneficiaries. Agencies are providing language that may simply be reproduced as a brief notice that the recipients provide or post

(depending on the particular regulatory requirements). This does not place an undue burden on recipients of direct Federal financial assistance, particularly when balanced against the notice's benefit—informing beneficiaries of valuable protections of their religious liberty. Accordingly, the Agencies decline to make any changes to their regulations based on these comments.

For example, DHS made clear in its NPRM preamble that individual written notice will frequently be impractical during brief, potentially one-time interactions between a provider and a beneficiary, such as at a soup kitchen. See 80 FR at 47294 & n.7. In such circumstances, DHS explained, a conspicuous posting rather than individual notices should satisfy the requirement.

The Agencies note that the burden imposed by these final regulations is discussed in each Agency's preamble section addressing burdens imposed under the Paperwork Reduction Act of 1995.

Change:

None.

Affected regulations:

None.

i. Phase-in of Written Notice

Summary of comments:

Commenters encouraged the Agencies to phase in the new notice and alternative provider referral requirements, and to implement these changes in a way that maximizes provider flexibility.

Response:

The Agencies agree with the commenters that a phase-in period is appropriate. This period will allow the Agencies time to provide policy

guidance or reference materials and training on these matters, including additional examples of the different ways providers can comply with these regulations. These regulations will become effective 30 days after publication in the

Federal Register

. However, recipients subject to these final regulations have until July 5, 2016 to comply with these final regulations.

Change:

These final regulations delay the date by which organizations will need to comply by 90 days to ensure sufficient time for providers to receive policy guidance or reference materials, and answers to their questions.

Affected regulations:

None.

j. Clarification of What Triggers the Written Notice Requirement

Summary of comments:

Commenters requested that the Agencies clarify the specific types of services that would trigger the notice obligation, provide examples of situations in which the notice can be posted as opposed to provided individually to each beneficiary, and describe when the nature of services provided or exigent circumstances would impact a provider's duty to deliver the written notice or the timing of the delivery of the notice. These commenters requested more specificity regarding possible exceptions to a provider's obligation to provide a written notice to a beneficiary in advance of providing the services.

Response:

The majority of the Agencies' NPRM preambles were specific regarding exceptions and timing for the written notice. See,

e.g.,

80 FR at 47332-33 (DOL); 80 FR at 47288 (DHS). In addition, with respect to those Agencies whose NPRM preambles discussed a limited exception for when the written notice may be posted (as opposed to individually provided to each beneficiary), those Agencies believe that the language in their NPRM preambles is adequate to describe those exceptions with respect to their specific programs. As for the request by commenters to clarify what is meant by “the earliest available opportunity,” the Agencies now clarify that “the earliest available opportunity” means the prompt provision of the notice, or provision of the notice as soon as reasonably practicable, after the services are provided. The Agencies are providing this clarification related to the timing of the delivery of the notice in this joint preamble, but the Agencies decline to include additional language in their final regulations. As noted above, these final regulations delay the date by which organizations will need to comply for 90 days to ensure sufficient time for providers to receive policy guidance or reference materials and answers to their questions.

Change:

None.

Affected regulations:

None.

2. Referrals

a. Burdens, Duties, and Liability of the Referring Organization

Summary of comments:

Commenters were concerned that the beneficiary protections in the proposed regulations were inconsistent with the Federal Charitable Choice provisions (42 U.S.C. 290kk-1(f)(1); 42 U.S.C. 604a(e); 42 U.S.C. 300x-65(e)(1)) by requiring that faith-based organizations find alternative providers for beneficiaries, as opposed to placing this burden on the Government. Commenters asked that the Government provide assistance to organizations making referrals. Commenters said that the documentation requirement could be quite burdensome for providers and intermediaries, and that organizations do not have enough staff to facilitate referrals. Commenters also said that the estimate most Agencies provided for carrying out the referral requirement—no more than two hours of a provider's time—was without basis. Other commenters noted that concerns about additional costs and other concerns related to the referral requirement were misplaced, pointing to the history of the Substance Abuse and Mental Health Services Administration (SAMHSA) referral requirements. Commenters also said that faith-based organizations should be protected from liability for the actions of, or services provided by, alternative providers.

Response:

The Agencies that are imposing beneficiary notice and referral requirements are aware of the burden that these requirements present. These Agencies believe, however, that the organizations required to make the referrals will generally be in the best position to identify alternative providers in reasonable geographic proximity and to make a successful referral of objecting beneficiaries to those alternative providers. In the event that an organization is unable to identify an alternative provider after a reasonable effort, the intermediary or Federal agency, as specified by agency-specific regulations, guidance, or other reference materials, will determine whether there is a suitable alternative provider to which the beneficiary can be referred. Under this process, the organization makes the initial effort, but if it is unable to identify an alternative provider, the burden shifts to the intermediary or the Agency (as applicable). The Agencies will provide additional directions, as needed, to organizations on whether they are responsible for the referral and when to contact an intermediary or the Agency in policy guidance or other reference materials. The Agencies are taking this approach due to the numerous differences among the programs administered by the Agencies. Agency-specific instructions will allow each Agency to tailor those instructions to the nature of the programs it administers.

The Agencies have sought to minimize the burden of the referral requirement to the greatest degree possible—while still fully implementing the Executive order—by limiting the referral requirement to “reasonable efforts” and providing assistance in cases where the faith-based organization is unable, on its own, to make a referral. As discussed in the Agencies' NPRM preambles or below, the Agencies believe that the number of requests for referrals will be minimal and that, on average, referrals will take no more than two hours. The Agencies' estimate of the number of referral requests faith-based organizations are likely to receive is based on SAMHSA's experience that its referral requirement has resulted in no requests for referrals that the Agencies know of to date. The Agencies now clarify that a provider need not spend more than approximately two hours of staff time in order to fulfill the “reasonable efforts” requirement. To be clear, the Agencies expect that much less staff time will be required to make a successful referral in most cases. Finally, the Agencies acknowledge that, in programs governed by the Charitable Choice provisions listed above, the statutes take precedence over these regulations, and the Government will continue to bear the full burden of making referrals as specified in those statutes.

As for the commenters' concern about the organizations' potential liability for the alternative providers' actions, these regulations are in no way intended to open the door to liability for faith-based organizations. Executive Order 13559 specifically notes that it “is not intended to, and does not, create any right or benefit, substantive or procedural, enforceable at law or in equity by any party against the United States, its departments, Agencies, or entities, its officers, employees, or agents, or any other person.” Executive Order 13559, § 2(d), 75 FR at 71323; see also Executive Order 13279, § 7, 67 FR at 77144.

Change:

None.

Affected regulations:

None.

b. Subjectivity of Beneficiary Objection

Summary of comments:

In reference to the proposed regulations' requirement that faith-based organizations make reasonable efforts to refer a beneficiary who “objects to the religious character of the organization,” commenters wrote that the term “object” is too subjective and open-ended. For example, at least one commenter suggested that the regulations may be ambiguous with respect to how specific a beneficiary's objection must be to trigger the referral requirement. Another commenter questioned why a beneficiary would need to object if a recipient of direct Federal financial assistance cannot impose a religious requirement on clients.

Response:

The Agencies decline to modify the proposed regulations. In order for a beneficiary's objection to trigger the referral requirements under this rule, it must be reasonably clear under the circumstances that the beneficiary is objecting to the organization because of its religious character. While most of the Agencies have not required any specific format for a beneficiary objection, they have offered model forms that provide a way for beneficiaries to state their objections clearly. A faith-based organization concerned about misconstruing a beneficiary's objection may use the model forms for that purpose or may develop another form that meets the regulations' requirements. The Agencies will also provide additional directions to organizations in policy guidance or reference materials regarding beneficiary objections.

Regarding the question of why a beneficiary would need to object, a beneficiary may, for example, be uncomfortable with receiving services in a location with religious symbols or from a faith-based organization even when the service being provided is secular in nature. Therefore, consistent with the Executive order, the notice of beneficiary rights will provide an opportunity for the beneficiary to object to receiving services from the faith-based organization on the basis of its religious character, even in circumstances where the organization is conducting its services in accordance with these final regulations.

Change:

None.

Affected regulations:

None.

c. Referrals to Non-Government-Funded Providers

Summary of comments:

Commenters recommended that if a referral to another Government-funded provider is not mandatory, the Agencies should clarify in regulations that a referral can be made to a non-Government-funded provider because such a referral is better than no referral at all. Some commenters requested that the final regulations make explicit that the organization's responsibility is limited to locating a nearby provider that is federally funded to provide the service. Some commenters recommended that the regulations should require that, when a provider refers a beneficiary to a non-Government-funded provider, the provider be required to provide a written notice to the beneficiary indicating whether the beneficiary foregoes any rights by attending the alternate provider.

Response:

The referral requirement in the Agencies' final regulations does not specify the nature of the funding of the alternative provider; it specifies only that the referral must be made to an alternative provider to which the beneficiary or prospective beneficiary does not object on the basis of religious character. In addition, the referral must be to a provider that offers services similar in substance and quality to those offered by the faith-based organization, has the capacity to accept the beneficiary, and is in reasonable geographic proximity to the location where the beneficiary or prospective beneficiary is receiving or would receive services (except for services provided by telephone, Internet, or similar means). The referral may be to another religiously affiliated provider if the beneficiary has no objection to that provider, but if the beneficiary requests a secular provider and one is available, the referral must be to that provider. While the Agencies anticipate that in some geographic areas the only referral option may be to an organization that does not receive Federal funds, the Agencies believe that if a federally funded alternative provider meets the above requirements, a referral should generally be made to that provider.

The Agencies encourage faith-based organizations to provide information to beneficiaries about potential alternative providers. However, the Agencies decline to require organizations to provide beneficiaries with written information regarding alternative providers, because Executive Order 13559 does not require such notice and because this could impose an unwarranted burden on faith-based organizations.

Change:

None except DOL, which is revising its referral regulations for reasons given in its agency-specific preamble (part IV.G.4.b.ii).

Affected regulations:

29 CFR 2.35(c) (DOL).

d. Qualifications of Alternative Provider

Summary of comments:

Some commenters supported the requirements in the proposed regulations regarding the qualifications of the alternative providers, including the requirement that the alternative provider have the services or benefits that the beneficiary seeks and that are within the range of services of the referring program. Other commenters stated that it would be unreasonable to impose a duty on faith-based organizations to attest to the quality or to the equivalent value or capacity of potential alternative providers as this information would rarely be readily available to faith-based organizations. One commenter recommended that the awarding entity (

i.e.,

the Agency or intermediary) give a list of providers within the geographic area of the faith-based organization for the organization's use in the referral process.

Response:

The Agencies generally decline to adopt the recommendations of the commenters. The Agencies recognize that an organization may not always be able to independently determine the relative substance and quality of services offered by an alternative provider. Nonetheless, if a referral is made, it must be to a provider that offers services similar in substance and quality to those offered by the organization. Under these final regulations, undertaking “reasonable efforts” to identify an alternative provider includes making a reasonable effort to ascertain the availability and services of an alternative provider. In its proposed and final regulations, USDA states that it may require the awarding entity to give the faith-based organization information about alternative providers in some cases. 7 CFR 16.4(g)(4). The rest of the Agencies, however, decline to adopt similar regulations because those Agencies believe that such a referral list could become outdated before it is used, and because the Agencies estimate that the number of referrals requested will be minimal. Those Agencies may address the use of such a referral list on a program-by-program basis.

Change:

None.

Affected regulations:

None.

e. Conditional Referral and Reasonable Efforts

Summary of comments:

Commenters requested that the Agencies require a referral rather than mandating “reasonable efforts” in providing a referral. Some Agencies also received a

request to define what constitutes “reasonable efforts” in referring a beneficiary to an alternative provider.

Response:

The Agencies decline to adopt the recommendations of the commenters. The Agencies believe that, in some cases, due to the location of the organization, availability of resources, the nature of the program, or other factors, a referral option may not be available. Therefore, the Agencies are requiring only that the organization make “reasonable efforts” to find an alternative provider. However, the Agencies believe that in most cases the organization, alone or with the assistance of the intermediary or Agency, will be able to find an alternative provider. As for providing a definition of the term, what constitutes “reasonable efforts” will depend on the circumstances. As noted above, the organization should at a minimum attempt to identify an alternative provider, determine what services the alternative provider offers, and determine whether the alternative provider is accepting new referrals. The Agencies will provide further policy guidance or reference materials for organizations so they can better understand their duties under the regulations.

Change:

None.

Affected regulations:

None.

f. Process for Determining Whether a Beneficiary Has Contacted the Alternative Provider

Summary of comments:

Commenters requested that the regulations include a process for faith-based organizations to determine whether a beneficiary has contacted the alternative provider. Commenters also requested that the regulations require organizations and intermediaries to maintain records regarding requests for alternative providers, including records of where the individual was referred, and provide such records to the Agency. Commenters emphasized that completing such a process and maintaining relevant records will ensure that faith-based organizations comply with the requirement to make reasonable efforts to refer beneficiaries to alternative providers. Commenters also recommended that the Agencies track how many beneficiaries request alternative providers, how many actually use an alternative provider, how many do not use any services, how many are not provided an alternative provider, and whether there are problems within the reporting procedures.

Response:

The Agencies agree that maintaining records of referrals is important. Each Agency will ensure that grantees are complying with the Executive order and implementing regulations, including maintaining records of referrals. However, the Agencies believe that maintaining records of referrals is not the only way to ensure compliance; the Agencies are also ensuring compliance through training and oversight. While maintaining records of referrals will help provide information about how many referrals are made and requested, the Agencies are not requiring recipients to follow up with each individual to determine if the services are used. Agency oversight will also identify any problems with the reporting procedures so that Agencies can handle such problems when they arise. This issue is covered in more detail under part III.F (Monitoring) and in some agency-specific preambles, including in some agency-specific Paperwork Reduction Act sections. It will also be covered in subsequent policy guidance or reference materials.

Change:

DHS in its proposed regulation required recipients to notify DHS of successful and unsuccessful referrals but has edited the language in its final regulations to clarify (1) that the recipient need only notify DHS (or an intermediate awarding entity) of unsuccessful referrals but (2) that the recipient must keep a record of both successful and unsuccessful referrals. HUD and HHS did not explicitly require grantees to maintain a record when they made a referral in their proposed regulations and have added such a requirement to their final regulations.

Affected regulations:

6 CFR 19.7(d) (DHS); 24 CFR 5.109(g)(4) (HUD); 24 CFR 87.3(k) (HHS).

g. Notification of Government and Timeframe of Referral

Summary of comments:

Commenters recommended that the regulations require organizations to notify both the Agency and any intermediary of each referral to an alternative provider. Another commenter suggested that, at a minimum, Agencies should require the intermediary to report the referral to the Agency upon receiving notice by the organization making the referral. One commenter supported the proposal that an organization be required to report to its awarding Agency whenever the organization cannot identify an alternative provider. The commenter suggested that the reporting requirement include a specific timeframe, such as promptly notifying the awarding Agency of every referral request.

Response:

Pursuant to these final regulations, when an organization makes a referral to an alternative provider, the organization must maintain a record of the referral. Therefore, requiring the organization to report the referral to the Agency or intermediary would be redundant given the paperwork that must already be retained by the organization, which is subject to review by the Agency or intermediary. The Agencies already have processes in place to monitor grantees and ensure compliance with regulatory requirements at regular intervals. However, prompt reporting to the awarding Agency or intermediary is needed in situations where the organization has determined that it is unable to identify an alternative provider. Without prompt reporting, an awarding Agency or intermediary might be unable to determine whether a referral can be made to a suitable provider. Therefore, the Agencies have clarified in their regulations, if their regulations did not already contain language to this effect, that when an organization is unable to identify a referral after reasonable efforts, the organization will be required to “promptly” report that fact to the Agency or intermediary.

Change:

The final regulations make clear that an organization that cannot make a referral must report that fact promptly to the intermediary or Agency.

Affected regulations:

6 CFR 19.7(d) (DHS); 7 CFR 16.4(g)(3) (USDA); 24 CFR 5.109(g) (HUD); 28 CFR 38.6(d)(4) (DOJ); 29 CFR 2.35(d) (DOL); 34 CFR 75.713(d), 34 CFR 76.713(d) (ED); 38 CFR 50.3(d) (VA); 45 CFR 87.3(k) (HHS).

h. Clarification of Who Is Responsible for Making the Referral

Summary of comments:

Many of the Agencies' proposed regulations stated that if a faith-based organization cannot locate an alternative provider, the Agency (or intermediary) “shall determine whether there is any other suitable alternative provider to which the beneficiary may be referred.” See proposed regulations at 80 FR at 47298 (6 CFR 19.7(d)) (DHS); 80 FR at 47252 (7 CFR 16.4(g)(4)) (USDA); 80 FR at 47311 (24 CFR 5.109(g)(3)(iv)) (HUD); 80 FR at 47325 (28 CFR 38.6(d)(4)) (DOJ); 80 FR at 47338 (29 CFR 2.35(d)) (DOL); 80 FR at 47346 (38 CFR 50.3(d)) (VA). Those proposed regulations also stated that “[a]n intermediary that receives a request for assistance in identifying an alternative provider may request assistance” from the Agency. See proposed regulations at 80 FR at 47298 (6 CFR 19.7(d)) (DHS); 80 FR at 47252 (7 CFR 16.4(g)(4)) (USDA); 80 FR at 47311 (24 CFR 5.109(g)(3)(iv)) (HUD); 80 FR at 47325 (28 CFR 38.6(d)(4)) (DOJ);

80 FR at 47338 (29 CFR 2.35(d)) (DOL); 80 FR at 47346 (38 CFR 50.3(d)) (VA). Commenters noted that under some of the Agencies' proposed regulations, the process required for responding to a beneficiary's request for an alternative provider was not clear. One commenter wrote that the language implied that when an intermediary is involved, the intermediary—rather than the Agency—is ultimately responsible for identifying the alternative provider.

Response:

The role of the intermediary may vary depending upon the Agency that made the award to the intermediary and the program under which the award was made. Most Agencies have provided that the intermediary, the Agency, or both will be available to assist the organization in finding an alternative provider. See final regulations at 6 CFR 19.7(d) (DHS); 7 CFR 16.4(g)(3) (USDA); 24 CFR 5.109(g)(3)(iv) (HUD); 28 CFR 38.6(d)(4) (DOJ); 29 CFR 2.35(d), (e) (DOL); 34 CFR 75.713(d)(2), 76.713(d)(2) (ED); 38 CFR 50.3(d) (VA). Some Agencies have determined that the intermediary should have the primary responsibility to help whenever the provider cannot locate an alternative provider, consistent with the policy that the intermediary is responsible for working directly with subrecipients, but also provide in their regulations that the intermediary may ask for assistance from the Agency or that the Agency will determine if a placement can be made when the intermediary cannot make one. See final regulations at 7 CFR 16.4(g)(3) (USDA); 24 CFR 5.109(g)(3)(iv) (HUD); 28 CFR 38.6(d)(4) (DOJ); 29 CFR 2.35(d), (e) (DOL); 34 CFR 75.713(d)(2), 76.713(d)(2) (ED). The Agencies believe that these regulations are sufficiently clear to delineate Agency and intermediary responsibilities, but will consider providing policy guidance or reference materials to clarify further.

Change:

None.

Affected regulations:

None.

E. Political or Religious Affiliation

1. Merit-Based Decisions

Summary of comments:

Several commenters requested that Agencies provide language in the final regulations to ensure that merit-based decisions include considerations of whether an organization will serve all beneficiaries and perform all services that are necessary to fulfill program objectives. Some commenters urged the Agencies to specifically limit funding awards to entities that can accomplish program goals. The commenters argued that requiring an organization to include a list of services the organization would or would not provide would afford the Agency a full understanding of the particular services an entity (or its subcontractors) will or will not provide. Commenters stated that, as a result, Agencies would make better funding decisions and protect beneficiaries from being denied needed services. In addition, one commenter recommended that the final regulations be revised to clarify that it would not constitute religious discrimination for the Government to prioritize contracting with entities that are willing to meet the full scope of the contract.

Response:

The Agencies believe that specifically limiting funding awards in this way is beyond the scope of Executive Order 13559. Therefore, the Agencies do not make any changes to the proposed regulations based on these comments.

Change:

None.

Affected regulations:

None.

2. Access to Federal Funding

Summary of comments:

One commenter recommended revising the regulations that state that decisions about awards of Federal financial assistance must be free from political interference or even the appearance of such interference and those decisions must be made on the basis of merit, rather than religion or religious belief. The commenter noted that certain laws may in fact require an Agency to treat secular and faith-based organizations differently when making funding decisions. Therefore, the commenter suggested adding language to this provision to the effect of “to the extent permitted by authorizing legislation.”

Response:

The Agencies agree that these final regulations may require different outcomes than those specified in program- or agency-specific statutes. However, standard rules of statutory and regulatory construction require that when there is a conflict between a Federal statute and regulations, the statute determines the outcome of the conflict. Thus, there is no need to include the language recommended by the commenter. When an Agency has identified that a Federal statute applicable to a particular Agency or program conflicts with these regulations, the Agency will discuss that issue in that Agency's agency-specific section of this preamble.

Change:

None.

Affected regulations:

None.

3. Political Influence

Summary of comments:

Several commenters stated that the proposed regulations regarding the selection of non-Federal entities for Federal financial assistance are biased against religion because they presume that any pressure to influence funding would be done to favor religion or religious belief. These commenters asserted that they thought it just as likely that any political pressure will be antireligious or hostile to a particular religion. The commenters recommended revising the proposed regulations to provide that decisions about the award of Federal financial assistance must be free from political interference or even the appearance of such interference and must be made on the basis of merit, not on the basis of prejudice

for or against

religion or religious belief. Alternatively, the commenters proposed adding language to make clear that faith-based organizations are eligible, on the same basis as any other organization, to participate in any Agency program for which they are otherwise eligible. These commenters recommended that neither the Agencies nor any State or local government receiving Federal financial assistance should be permitted to discriminate in favor of or against an organization on the basis of the organization's religious character or affiliation.

Response:

Some of the proposed regulations did not completely track the language of the Executive order regarding the prohibition against considering religion or religious beliefs, and the instruction to guard against political influence, in selecting recipients of Federal financial assistance. The Agencies agree with the commenters that the final regulations should clearly state that political bias or appearance of bias, or the consideration of an organization's religious affiliation or lack thereof, is prohibited in the selection of non-Federal entities for Federal financial assistance.

Change:

The final Agency regulations now include language that more closely follows the Executive order in this regard, which states that “[d]ecisions about awards of Federal financial assistance must be free from political interference or even the appearance of such interference and must be made on the basis of merit, not on the basis of the religious affiliation of a recipient organization or lack thereof.” Executive Order 13279, § 2(j), as amended by Executive Order 13559, § 1(b), 75 FR at 71321. Because the context of this requirement is different for each Agency, the Agencies that are making changes discuss in their agency-specific sections of this preamble how each agency's regulations make clear that Agencies are prohibited from considering the religious affiliation, or

lack thereof, of a non-Federal entity in awarding Federal financial assistance.

Affected regulations:

2 CFR 3474.15(b)(2), 34 CFR 75.52(a)(2), 76.52(a)(2) (ED); 7 CFR 16.3(a) (USDA); 22 CFR 205.1(j) (USAID); 24 CFR 5.109(c) (HUD); 28 CFR 38.4(b) (DOJ); 29 CFR 2.39 (DOL); 38 CFR 50.4 (VA).

F. Monitoring

Summary of comments:

Several commenters suggested that the regulations be changed to “[i]mprov[e] monitoring of constitutional, statutory, and regulatory requirements that accompany federal social service funds.” Specifically, several commenters asked that the proposed regulations be revised to mandate specific assurances of compliance, as well as specific monitoring and enforcement requirements. One commenter noted that only DOJ had included proposed regulations regarding monitoring for compliance, see proposed regulations at 80 FR at 47325 (28 CFR 38.8) (DOJ), and asked that other Agencies include these provisions, too. A commenter also noted with approval that DOJ's proposed regulations would require organizations to sign assurances that they would comply with the regulations. See proposed regulations at id. (28 CFR 38.7) (DOJ). Several commenters recommended that the other Agencies include assurance requirements in their regulations as well. One commenter recommended that the Agencies include language in the preamble to the final regulations describing the process by which Agencies would require affirmative assurances from awardees that the awardees will comply with the regulations and the ways the regulations would be enforced. These commenters asked that each Agency that elected not to require a separate assurance of compliance as part of these regulations add in its general assurances a citation to these regulations. One commenter also recommended that the other Agencies follow DOJ's proposed enforcement procedures by designating a specific office to enforce the regulations.

Response:

The Agencies agree that they must guard against inappropriate uses of Federal financial assistance by monitoring and enforcing all constitutional, statutory, and regulatory standards governing such assistance. Executive Order 13559 amended Executive Order 13279 to describe Federal agencies' specific obligations to monitor and enforce constitutional, statutory, and regulatory requirements regarding religion-related issues, requiring that the Federal Government implement Federal programs in accordance with the Establishment Clause and the Free Exercise Clause of the First Amendment to the United States Constitution and other applicable law. The Executive order also provided that Federal agencies must monitor and enforce standards regarding the relationship between religion and government in ways that avoid excessive entanglement between religious bodies and governmental entities. Executive Order 13279, § 2(e), as amended by Executive Order 13559, § 1(b), 75 FR at 71320.

The Agencies agree with the commenters that they must vigorously monitor and enforce applicable regulations in this regard. However, certain Agencies are constrained by statutes, resources, or both from establishing a central office to monitor and enforce compliance with the requirements in these final regulations. Therefore, the Agencies have concluded that each Agency needs to maximize its resources to ensure that recipients comply with these final regulations in a manner consistent with the Agency's statutes, other regulations, and structure. Because each Agency has a unique structure and statutory enforcement requirements, each Agency describes in its agency-specific preamble, or will describe in its policy guidance or reference materials, how its offices will ensure compliance with these final regulations.

As stated in its regulations, DOJ will require specific assurances from all organizations that they will comply with the final regulations. See proposed regulations at 80 FR at 47325 (28 CFR 38.7(a)) and final regulations at 28 CFR 38.7(a). Several commenters recommended that the other Agencies adopt similar regulations. However, many Agencies already collect the information needed to assure that their grantees and subgrantees comply with all Federal requirements applicable to their grant programs, including the new requirements established in these final regulations. For example, many Agencies require applicants to provide certain standard assurances in the Standard Form 424 (SF-424), see,

e.g.,

45 CFR 75.206 (HHS), including the commenter's proposed assurance that the applicant “will comply with all applicable requirements of all other Federal laws, executive orders, regulations[,] and policies governing this program”; SF-424B (Assurances for Non-Construction Programs) and SF-424D (Assurances for Construction Programs), both available at

http://www.grants.gov/web/grants/forms/sf-424-family.html#sortby=1.

Agencies that rely on existing assurances do not wish to burden organizations, including faith-based organizations, with an additional assurance of compliance.

The Agencies do agree that organizations that receive direct Federal financial assistance need to be aware of these new requirements and have meaningful guidance from the Agencies to assist them in complying with the requirements. As already noted, the Agencies will provide training and policy guidance or other reference materials to grantees to effectively implement these final regulations. To ensure that the Agencies meet this objective, each Agency is devoting substantial resources to ensure that its program staff understand their responsibilities to ensure that grantees, subgrantees, and contractors that provide social services to beneficiaries under programs of direct Federal financial assistance comply with these final regulations. Given the substantial work needed to make sure that all grantees, intermediaries, and subgrantees understand what they must do under these final regulations, the Agencies have decided to delay the date by which recipients of Federal financial assistance must comply with these final regulations beyond the standard 30 days. These final regulations will become effective in 30 days. However, the Agencies have decided to delay the compliance date for 90 days, as discussed in other parts of this preamble.

Change:

None except HUD, which is changing its regulations as explained in its agency-specific preamble (part IV.E.6).

Affected regulations:

24 CFR 5.109(g)(4) (HUD).

G. Other Issues

1. Nondiscrimination in Employment Decisions/Religious Freedom Restoration Act

Summary of comments:

Several commenters requested that the proposed regulations be modified to expressly prohibit employment discrimination on the basis of religion by recipients of Federal financial assistance, including faith-based organizations. Commenters also stated that the exemption from the Federal prohibition on employment discrimination on the basis of religion, set forth in section 702(a) of the Civil Rights Act of 1964, 42 U.S.C. 2000e-1(a) (Title VII exemption), applies only to wholly privately funded faith-based organizations, not religious organizations that receive Federal financial assistance. Other commenters requested that the final regulations

make clear that faith-based organizations that receive such assistance do not lose the ability to make employment decisions on the basis of religion. Some commenters further requested a preclearance process whereby a faith-based organization subject to a particular statutory employment nondiscrimination requirement could apply to the Agency for a decision on whether the Religious Freedom Restoration Act (RFRA), 42 U.S.C. 2000bb through 2000bb-4, exempts the organization from that statutory requirement.

Response:

The Agencies decline to adopt the commenters' recommendations. Executive Order 13559 does not address employment issues, and thus, in general, the Agencies did not address these issues through proposed new regulations or alterations of existing regulations.

As noted in its 2015 Supplemental Notice of Proposed Rulemaking (“SNPRM”) and discussed further in its agency-specific preamble in part IV.B of this preamble, DHS initially proposed regulations in January 2008 to implement Executive Order 13279. DHS's 2015 proposed regulations included an employment provision that is consistent with its 2008 NPRM and the other Agencies' current regulations on these matters. Compare proposed regulations at 80 FR at 47298 (6 CFR 19.9) (DHS), with,

e.g.,

existing regulations at 28 CFR 38.2(f) (DOJ), and final regulations at 28 CFR 38.5(e) (DOJ). As noted elsewhere in this preamble, the scope of DHS's 2015 proposed regulations was broader than the scope of the other Agencies' proposals to amend their existing rules. In consideration of the importance of uniformity among Federal agencies on these matters, DHS has declined to make further changes related to employment.

Change:

None.

Affected regulations:

None.

2. Reinforcement of Other Nondiscrimination Protections

Summary of comments:

Commenters recommended that these regulations should reinforce that federally funded programs must comply with other existing protections that prohibit discrimination on the basis of race, color, national origin, sex, disability, or age.

Response:

These final regulations address discrimination against beneficiaries on the basis of religion, a religious belief, a refusal to hold a religious belief, or a refusal to attend or participate in a religious practice. The Agencies agree that grantees must comply with all other anti-discrimination laws, regulations, and terms and conditions that are applicable to their awards. Yet, those existing protections are outside the scope of the Executive order, and the Agencies therefore decline to adopt this recommended change. These regulations only implement Executive Orders 13279 and 13559 and do not modify or interpret other applicable statutory or regulatory provisions addressing discrimination on the basis of religion.

Change:

None.

Affected regulations:

None.

3. Applicability to Sub-Awards, Including Contracts

Summary of comments:

Commenters argued that the clause in each Agency's proposed regulations prohibiting grantees from discriminating against beneficiaries on the basis of their religion or religious belief should apply to any subrecipient of a grantee, including a contractor of a grantee or subrecipient, in addition to the grantee.

Response:

The clause in each Agency's regulations that prohibits grantees from discriminating against a program beneficiary or prospective beneficiary on the basis of religion, a religious belief, a refusal to hold a religious belief, or a refusal to attend or participate in a religious practice applies to any subrecipient in addition to the grantee itself. ED included specific proposed regulations to reinforce this requirement. See final regulations at 2 CFR 3474.15(f). However, the other Agencies do not believe that they need to revise their final regulations to enforce this requirement because recipients of Federal financial assistance are required to ensure that their contractors comply with all applicable requirements, including the requirements in these final regulations and the Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) that was adopted by the Agencies on December 19, 2014. See 79 FR 75867. Specifically, 2 CFR 200.318(b) requires that non-Federal entities maintain oversight to ensure that contractors perform in accordance with the terms, conditions, and specifications of their contracts or purchase orders. Non-Federal entities must include conditions in their contracts with every organization that provides services to beneficiaries to ensure that the contractor complies with all regulations applicable to the contract, including the requirements in these final regulations.

Change:

None.

Affected regulations:

None.

4. Definitions for “Social Service Program” and “Federal Financial Assistance”

Summary of comments:

Commenters recommended that the regulations of the Agencies, including USAID, should, in some instances, define “social service program” as well as “Federal financial assistance.” Both definitions first appeared in section 1 of the original Executive Order 13279. Commenters felt that the definitions were needed in the regulations to determine which Government programs are subject to Executive Order 13279 as amended by Executive Order 13559.

Response:

When identifying “social service programs” to which these regulations apply, the Agencies are guided by the definition in section 1 of Executive Order 13279, as well as the relevant case law interpreting the Establishment Clause and the Free Exercise Clause of the First Amendment to the U.S. Constitution. The Agencies believe it is not feasible to develop a definition of “social service programs” that contemplates and addresses the array of programs to which these final regulations apply. For example, HUD generally applies its regulations to all programs that it administers, including programs in which HUD awards Federal financial assistance through contracts, grants, and cooperative agreements. See,

e.g.,

existing regulations at 24 CFR 5.109(a). Therefore, each Agency has either addressed this matter in its agency-specific preamble or will address this matter through forthcoming policy guidance or reference materials.

Change:

None.

Affected regulations:

None.

5. Display of Religious Symbols

Summary of comments:

Commenters requested a requirement that religious symbols be removed at the time and location where federally funded services are offered because beneficiaries of federally funded services will otherwise understand the retention of religious symbols as government endorsement of religion. Commenters argued that requiring or encouraging individuals to encounter religious symbols in order to receive government services is unconstitutional. They also stated that beneficiaries should not be forced to accept much-needed services in an environment that makes them feel unwelcomed or pressured. One commenter also cited a study finding that religious symbols can measurably affect behavior, even when displayed with no intent to proselytize or persuade.

Response:

The Executive order provides that “faith-based organizations that receive Federal financial assistance may use their facilities to provide social services supported with Federal financial assistance, without removing or altering religious art, icons, scriptures, or other symbols from these facilities.” Executive Order 13279,

§ 2(g), as amended by Executive Order 13559, § 1(b), 75 FR at 71320. The Agencies are satisfied that this provision is constitutional and believe that it is consistent with Federal statutes that affirm this principle (see,

e.g.,

42 U.S.C. 290kk-1(d)(2)(B)) and the general practice of Agencies that do not otherwise limit art or symbols that recipients of Federal financial assistance may display in the structures where agency-funded activities are conducted. While the Agencies decline to adopt the recommendation to depart from the Executive order by prohibiting the display of religious symbols in buildings where federally funded programs are conducted, these regulations introduce a process whereby beneficiaries seeking services funded by direct, domestic Federal financial assistance may object to an organization's religious character and seek referral to an alternative provider.

Change:

None.

Affected regulations:

None.

6. Eligibility of Faith-Based Organizations To Receive Federal Funding

Summary of comments:

Some commenters objected to the Federal Government making any financial assistance available to faith-based organizations because they believe that such assistance violates the Establishment Clause. Other commenters were concerned that making funds available to faith-based organizations would involve entanglement between church and state. Several of the commenters were concerned that the receipt of Federal funds by faith-based organizations would result in Federal funds being used to promote religion, coerce beneficiaries, or discriminate against beneficiaries who do not hold the same beliefs as the faith-based organizations. Other commenters were concerned that making funds available to faith-based organizations would divert Federal funds toward religion and result in support of religious education.

Response:

These final regulations do not violate constitutional principles of separation of church and state. The Supreme Court has determined that the Establishment Clause does not prohibit faith-based organizations from receiving government funds under appropriate conditions, see,

e.g., Bowen

Kendrick,

487 U.S. 589 (1988);

Zelman

Simmons-Harris,

536 U.S. 639 (2002), but at the same time has cautioned that “[a]id normally may be thought to have a primary effect of advancing religion . . . when it funds a specifically religious activity in an otherwise substantially secular setting,”

Hunt

McNair,

413 U.S. 734, 743 (1973). The regulations heed both these principles by permitting faith-based organizations to receive funds to participate in social service programs while providing that direct Federal financial assistance may not be used to pay for “explicitly religious activities” such as religious instruction, devotional exercises, worship, or proselytization. Furthermore, replacing “inherently religious activities” with the term “explicitly religious activities” provides greater clarity about the separation of activities funded by direct Federal financial assistance from religious activities and more closely matches constitutional standards as they have developed in case law. Because the regulations would require that grant services be offered separately in time or place from explicitly religious activities, no faith-based organization would be allowed to use Federal funds to promote religion or coerce beneficiaries, and there would be no entanglement of church and state in providing needed services to beneficiaries. In these instances, the Government does not encourage or promote any explicitly religious activities.

Finally, under the current regulations established under Executive Order 13279 (

i.e.,

those preexisting this rulemaking), organizations receiving Federal financial assistance are prohibited from discriminating against beneficiaries based on religion or religious belief. See final regulations at 7 CFR 16.3(a) (USDA); 22 CFR 205.1(e) (USAID); 24 CFR 5.109(h) (HUD); 28 CFR 38.1(d) (DOJ); 29 CFR 2.33(a) (DOL); 34 CFR 75.52(e), 76.52(e) (ED); 38 CFR 61.64(e), 62.62(e) (VA); 45 CFR 87.2(e) (HHS). This regulatory requirement is incorporated into the conditions that apply to every Federal award. Thus, an organization that receives Federal financial assistance and that discriminates against a beneficiary would be violating the terms and conditions of its grant and rendering its grant subject to termination by the funding Agency. In addition, the final regulations require faith-based organizations that receive domestic direct Federal financial assistance to notify beneficiaries that those organizations may not discriminate against beneficiaries on the basis of religion, religious belief, a refusal to hold a religious belief, or a refusal to attend or participate in a religious practice. See final regulations at 6 CFR 19.6(a)(1) (DHS); 7 CFR 16.4(f)(1)(i) (USDA); 24 CFR 5.109(g)(1)(i) (HUD); 28 CFR 38.6(c)(1)(i) (DOJ); 29 CFR 2.34(a)(1) (DOL); 34 CFR 75.712(a)(1), 76.712(a)(1) (ED); 38 CFR 50.2(a)(1) (VA); 45 CFR 87.3(i)(1)(a) (HHS). Thus, beneficiaries will have the information they need to protect themselves from discrimination based on religion or religious belief.

Based on these considerations, the Agencies decline to make any changes to the proposed regulations regarding the eligibility of faith-based organizations to receive grants under Federal social service assistance programs.

Change:

None.

Affected regulations:

None.

7. Training Requirements

Summary of comments:

Commenters argued that proper and regular training of Agency employees will be necessary to ensure that these regulatory requirements are understood and implemented. They recommended that the Agencies commit, through these final regulations, to provide training at least once every 2 years. The commenters argued that without including a commitment to regular training in these regulations, there is no assurance that training will continue in the future. Similarly, one commenter relayed the commenter's understanding that the White House Office of Faith-Based and Neighborhood Partnerships would urge the Agencies to hold trainings on the new regulations, but the commenter suggested that the written regulations should include a commitment by the Agencies to do so on at least a biennial basis.

Response:

Executive Order 13559 specifically tasked the Working Group with addressing training on these requirements for Government employees and employees of recipients of Federal financial assistance. See Executive Order 13279, § 3(b)(viii), as amended by Executive Order 13559, § 1(c). In the

Report to the President: Recommendations of the Interagency Working Group on Faith-Based and Other Neighborhood Partnerships,

dated April 2012, available at

https://www.whitehouse.gov/sites/default/files/uploads/finalfaithbasedworkinggroupreport.pdf,

the Working Group recommended that training be addressed in the non-regulatory guidance. Id. at 6, 27-29. The Agencies recognize the importance of proper training in assuring implementation and ongoing compliance with these requirements but do not agree that training requirements must be addressed through regulations. Rather, the Agencies intend to issue policy guidance or reference materials that will assist recipients, and adopt

policies that will address the manner and frequency by which each Agency will carry out training sessions for Agency staff and external stakeholders.

Change:

None.

Affected regulations:

None.

IV. Agency-Specific Issues and Certifications

A. Department of Education

ED received comments on its proposed regulations from 93 parties. As reflected below, unless otherwise specified, all comments received by ED are addressed fully in the discussion of cross-cutting issues in part III of this preamble, and those responses are adopted by ED. Some of the cross-cutting comments addressed in part III of the preamble were not received by ED and ED concurs in the part III resolution of those comments unless specifically noted either in part III or this agency-specific part IV.A of the preamble.

ED addresses in this part of the preamble the ED-specific comments not addressed in part III of the preamble and provide ED-specific findings and certifications. ED does not discuss in this part of the preamble minor or technical changes that were made to provide greater consistency or simplify the language in the regulations.

This agency-specific discussion has the same organization as part III of the preamble, outlined as follows:

1. Prohibited Use of Direct Federal Financial Assistance

2. Direct and Indirect Federal Financial Assistance

3. Intermediaries

4. Protections for Beneficiaries

a. Beneficiary Notice

b. Referrals

5. Political or Religious Affiliation

6. Monitoring

7. Other issues

a. Nondiscrimination in Employment Decisions/RFRA

b. Reinforcement of Other Non-Discrimination Protections

c. Existing Anti-Discrimination Laws (

e.g.,

Race, Color And National Origin)

d. Definitions for “Social Service Program” and “Federal Financial Assistance”

e. Display of Religious Symbols

f. Eligibility of Faith-Based Organizations To Receive Federal Funds

g. Training Requirements

8. ED Findings and Certifications

If ED does not need to address a comment outlined above, ED notes “Covered in part III of this preamble.”

1. Prohibited Use of Direct Federal Financial Assistance

With the exception of the response to the comments regarding chaplaincy and similar services, ED adopts the responses in the cross-cutting section of the preamble related to prohibited uses of direct Federal financial assistance. Regarding chaplaincy and similar services, ED agrees that those services should not be subject to direct Federal financial assistance restrictions and, therefore, are not subject to the requirements in the final regulations regarding separation of time or place and the notice and referral requirements. ED, however, declines to include language in its final regulations regarding chaplaincy and similar services because it has no programs that fund such services.

2. Direct and Indirect Federal Financial Assistance

Consistent with the discussion in part III, the provision in ED's final regulations prohibiting discrimination against beneficiaries on the basis of religion, religious belief, a refusal to hold a religious belief, or refusal to attend or participate in a religious practice applies to all private organizations receiving ED funds under program of direct Federal financial assistance, regardless of whether they received direct or indirect financial assistance. See 2 CFR 3474.15(f), 34 CFR 75.52(e), 76.52(e).

ED adopts the response in part III to comments regarding the distinction between direct and indirect Federal financial assistance. ED notes, however, that since ED published the NPRM there has been one significant change related to this topic. Specifically, in the NPRM ED stated that ED had two programs that provided “indirect Federal financial assistance,” as defined in the proposed regulations. One of those exceptions involved supplemental educational services (SES). ED indicated that in most cases an SES provider that contracts with a local educational agency (LEA) pursuant to section 1116 of title I, part A of the Elementary and Secondary Education Act of 1965 (ESEA), as amended by the No Child Left Behind Act of 2001, would be providing services under a program supported only by “indirect Federal financial assistance” because, by statute, the government program is neutral toward religion and it is the parents who choose from among approved providers of SES. However, on December 10, 2015, the President signed into law the Every Student Succeeds Act (ESSA), Pub. L. 114-95, which reauthorizes the ESEA. Among the changes to the ESEA under the ESSA, ED notes that LEAs will no longer be required to provide SES, starting in Federal fiscal year 2017. The other exception discussed in the NPRM, the District of Columbia School Choice Incentive Program (DC Choice Program), is unaffected by the ESSA and will continue to provide indirect Federal financial assistance. As noted in the NPRM, the DC Choice program is subject to statutory nondiscrimination requirements not included in these final regulations.

3. Intermediaries

Except as required in these final regulations, ED does not use the term “intermediaries” in its regulations, but it does administer programs that provide assistance through pass-through entities that act as intermediaries. ED's pass-through entities are States that administer programs under the regulations that apply only to State-administered programs. See 34 CFR part 76. A few of ED's discretionary grant programs also authorize grantees to award subgrants and those programs are subject to ED's grant administration regulations in 34 CFR part 75. The regulations in parts 75 and 76 describe the different responsibilities that States and other grantees that are authorized to award subgrants have regarding the subgrants they award. ED also notes that in cases where a subgrantee awards a contract to a faith-based organization to provide program services under a program of direct Federal financial assistance, the subgrantee acts as an intermediary of the faith-based contractor. See 2 CFR 3474.15; 34 CFR 76.52, 76.712-76.714.

4. Protections for Beneficiaries

a. Beneficiary Notice

i. Written Notice Requirement for Providers That Receive Indirect Federal Financial Assistance

This issue was addressed in part III of the preamble. In addition, ED made edits to the regulations requiring faith-based organizations to provide the notice specified in appendix A to 24 CFR part 75. These changes clarify that a faith-based organization that provides program services to beneficiaries under an ED program of direct Federal financial assistance may do so under a contract, as well as under a grant or subgrant. Regardless of whether the program services are provided under a contract, grant, or subgrant, faith-based organizations have the same responsibilities to give notice to beneficiaries of their rights.

ii. Written Notice Language

ED's final regulations include changes to the proposed regulations regarding the notice that faith-based organizations must provide beneficiaries. As described in part III of this preamble, ED

has amended the prohibition against private organizations discriminating against beneficiaries based on their religion or religious belief to add a prohibition against discrimination based on a refusal to hold a religious belief, or refusal to attend or participate in a religious practice. See 2 CFR 3474.15(c)(1), (f); 34 CFR 75.52(e), 75.712(a)(1); 34 CFR part 75, appendix A, paragraph (1); 34 CFR 76.52(e), 76.712(a)(1). The Department has also made edits to the form in appendix A so the faith-based organization can identify the non-Federal entity that made the award to the organization.

iii. Reporting Violations of the Protections in the Written Notice

Consistent with the discussion in part III of this preamble, ED has made changes to the language regarding the rights of beneficiaries and in the notice that must be provided to beneficiaries under a direct Federal financial assistance program. The notice now specifically informs beneficiaries that they have a right to file a complaint regarding any denials of services or benefits. See 34 CFR 75.712(a)(5), appendix A to part 75, paragraph (5), and 76.712(a)(5).

iv. Guarantee of Referral in the Written Notice

Covered in part III of this preamble.

v. Accessibility of the Written Notice

Covered in part III of this preamble.

vi. Services Not Provided and Prioritization of the Written Notice

Covered in part III of this preamble.

vii. Written Notice and Referral Forms

Covered in part III of this preamble.

viii. Burden of Written Notice

Covered in part III of this preamble.

ix. Phase-In of Written Notice

Covered in part III of this preamble.

x. Clarification of What Triggers the Written Notice Requirement

Covered in part III of this preamble.

b. Referrals

i. Burdens, Duties, and Liability of the Referring Organization

Covered in part III of this preamble.

ii. Subjectivity of Beneficiary Objection

As discussed in part III of this preamble, one commenter was concerned that at least one agency did not clearly indicate when a faith-based organization had a duty to make reasonable efforts to refer a beneficiary to an alternative provider. ED notes that its final regulations include a notice, specified in appendix A, that faith-based organizations are required to use and that notice includes a check box for a beneficiary to object to the religious character of the organization. When that notice is returned with the objection box checked, a faith-based organization's duty to make reasonable efforts to refer a beneficiary to an alternative provider will be clear.

iii. Referrals to Non-Government Funded Providers

Covered in part III of this preamble.

iv. Qualifications of Alternative Provider

Covered in part III of this preamble.

v. Conditional Referral and Reasonable Efforts

Covered in part III of this preamble.

vi. Process for Determining Whether a Beneficiary Has Contacted the Alternative Provider

The form included as appendix A to part 75 specifically gives beneficiaries three options. The beneficiary can ask the faith-based organization to do one of the following: (1) Follow up with the beneficiary, providing a name and contact information; (2) follow up with the alternative service provider; or (3) not follow up. The policy guidance ED is developing to assist faith-based organizations in complying with the final regulations will emphasize the organizations' responsibility to comply with the wishes stated on the form.

ED noted in the preamble to its proposed regulations that ED had regulations outside its proposed regulations that required its grantees and subgrantees to maintain records regarding all activities related to the projects and programs they administer. See 2 CFR 200.333, 3474.1; 34 CFR 75.731, 76.731. Therefore, ED did not include any recordkeeping requirements in its proposed regulations. As noted in part III.D.2.f of this preamble, the Agencies made changes to clarify the responsibilities of faith-based service providers to distinguish between their obligations if they made a successful referral or could not make a referral. ED decided to add language to its revised §§ 75.713(d) and 76.713(d) to clarify the types of records that a faith-based organization would have to maintain, at a minimum, if it made a successful referral. See revised §§ 75.713(d)(1), 76.713(d)(1). These changes were not needed to require recordkeeping regarding referrals but to clarify what types of records had to be maintained, at a minimum.

vii. Notification of Government and Timeframe of Referral

Consistent with the discussion in part III, ED has made changes to the proposed regulations to distinguish between the responsibilities of faith based organizations when they make a successful referral and when they are unable to refer a beneficiary to an alternative provider. If a faith-based organization makes a successful referral, the final regulations specify the content of the record that the organization must maintain, requiring a record of the name of the alternative provider and its address and contact information. However, when an organization cannot make a referral, the organization must promptly notify the entity that made the award under which the referral could not be made. For example, a grantee that could not make a referral would have to promptly notify ED and a subgrantee that could not make a referral would notify the State or other pass-through entity. See final regulations at 34 CFR 75.713(d), 76.713(d). If the entity that made the award cannot identify an alternative provider to which a referral can be made on behalf of the faith-based organization, it must promptly notify the entity that awarded it financial assistance. For example, if a faith-based subgrantee can't make a referral and promptly reports that fact to its pass-through entity and the pass-through entity also cannot identify and make a referral, the pass-through entity must promptly notify ED, which would then be responsible for determining whether a referral can be made. All grantees and subgrantees of ED must maintain financial records and records regarding compliance with grant requirements, including those in these final regulations. See final regulations at 2 CFR 200.333; 34 CFR 75.730-75.732, 76.730, 76.731. Those records must include documentation of the efforts made by the faith-based organization to make a referral and its prompt reporting to its awarding agency if it can't make a referral to an alternative provider.

viii. Clarification of Who Is Responsible for Making the Referral

ED has made changes to the proposed regulations so that, in these final regulations, grantees, including States, and subgrantees must make the initial effort to determine whether a referral can be made when a faith-based organization cannot make a referral to an alternative provider. Under the proposed regulations, the order in which intermediaries and ED must

make such a determination was not clear, especially in cases where a grantee or subgrantee awarded a contract to provide program services. These final regulations clearly require a faith-based contractor that cannot make a referral to promptly report that fact to the agency that made the award to the organization, which has the responsibility to determine if a suitable referral can be made. If that agency is a subgrantee and it cannot make a referral, it must promptly report that fact to the grantee that awarded the subgrant, which then has the responsibility to determine if a suitable referral can be made.

ED notes that in the case of subgrants awarded by States, the States are much more aware of the resources in their States and are better equipped to identify potential alternative providers than ED. Therefore, ED has changed the language in 34 CFR 75.713(d) and 76.713(d) to make clear that the subgrantee or grantee, including a State, that made the award under which the referral could not be made must determine whether a referral to an alternative can be made. Ultimately, if neither the subgrantee nor grantee, including a State, can identify an alternative service provider, the grantee must notify ED, which would then have to determine whether a referral can be made. ED is developing policy guidance to assist subgrantees and grantees, including States, in developing procedures to determine whether an alternative placement can be made.

5. Political or Religious Affiliation

a. Merit-Based Decisions

Covered in part III of this preamble.

b. Access to Federal Funding

Summary of comments:

ED received one agency-specific comment regarding the perceived conflict between these final regulations and statutory requirements that may require faith-based organizations to be treated differently from other organizations. Specifically, the commenter indicated that in programs under ESEA that require an LEA to provide equitable services to children enrolled in a private school, those services may be provided through a contract. See 20 U.S.C. 6320(a)(5), 7881(a)(5). The commenter further noted, however, that under those programs a contractor “shall be independent of such private school and of any religious organization.” See 20 U.S.C. 6320(d)(2)(B)), 7881(d)(2)(B). The commenter recommended that the proposed regulations be modified to reflect such statutory restrictions.

Response:

ED does not believe that a change to the proposed regulations is necessary to address this issue. Although the proposed regulations provide that a faith-based organization is eligible to contract with grantees and subgrantees on the same basis as other private organizations, where a statutory provision provides otherwise, that provision controls.

Changes:

None.

c. Political Influence

Consistent with the discussion of this comment in part III, ED has made changes to the proposed regulations to more closely track the language in Executive Order 13559, which provides that decisions “about awards of Federal financial assistance must be free from political interference or even the appearance of such interference and must be made on the basis of merit, not on the basis of the religious affiliation of a recipient organization or lack thereof.” The proposed regulations did not include the phrase “or lack thereof.” These final regulations now include that phrase. See final regulations at 2 CFR 3474.15(b)(2); 34 CFR 75.52(a)(2), 76.52(b)(2).

6. Monitoring

ED is developing policy guidance to ensure that its grantees, subgrantees, and contractors of those recipients are fully informed of their responsibilities regarding the treatment of private organizations and that these organizations understand their responsibilities toward the beneficiaries they serve under programs funded by ED. Within 90 days after this final rule is published, ED intends to provide training to its employees regarding their responsibility to ensure that faith-based organizations are treated fairly in competitions administered by ED. ED will also train its employees so they can provide policy guidance to applicants and grantees, ensuring that they are aware of their responsibilities under these final regulations.

7. Other Issues

a. Nondiscrimination in Employment Decisions/Religious Freedom Restoration Act

Covered in part III of this preamble.

b. Reinforcement of Other Non-Discrimination Protections

Covered in part III of this preamble.

c. Existing Anti-Discrimination Laws (

e.g.,

Race, Color and National Origin)

Covered in part III of this preamble.

d. Definitions for “Social Service Program” and “Federal Financial Assistance”

As noted in part III of this preamble, ED proposed regulations that would apply to all of its discretionary grant programs because most of its programs are social service programs. There was no need to delineate which ED programs are social service programs because these final regulations do not apply to the student financial assistance programs of ED. Those programs are not subject to the grant regulations in 34 CFR parts 75 and 76, which apply only to discretionary and State-administered programs of ED. These regulations also do not apply to ED's research programs because, even though those programs are subject to these final regulations in 34 CFR parts 75 and 76, they do not serve beneficiaries. Given that these regulations do not apply to student financial assistance or research programs, they also do not address whether a particular program was considered a “social service” program.

e. Display of Religious Symbols

Covered in part III of this preamble.

f. Eligibility of Faith-Based Organizations To Receive Federal Funding

Covered in part III of this preamble.

g. Training Requirements

As noted in the discussion of the monitoring issues in this ED-specific part of the final rule notice, ED is developing training for its employees and policy guidance and resource materials to ensure compliance with these final regulations.

8. ED Findings & Certifications

The following reflect ED findings and certifications that are not otherwise addressed in Part V.

Paperwork Reduction Act of 1995

The Paperwork Reduction Act of 1995 (PRA) does not require you to respond to a collection of information unless it displays a valid OMB control number. ED displays the valid OMB control number assigned to the collection of information and notice requirements in these final regulations at the end of each affected section of the regulations. The preamble to ED's NPRM assessed the burden imposed under the following proposed regulations: 2 CFR 3474.15; 34 CFR 75.712, 75.713, appendix A to part 75, 76.712, and 76.713. See 80 FR 47253 at 47261-47265. These final regulations make minor changes to these proposed regulations to clarify the information that faith-based organizations must

maintain when they make successful referrals and no longer require faith-based organizations to notify ED or any intermediary when successful referrals are made. These changes do not affect the burden analysis included in ED's NPRM.

Assessment of Educational Impact

In accordance with section 411 of the General Education Provisions Act, 20 U.S.C. 1221e-4, ED requested comments in the NPRM on whether the proposed regulations would require transmission of information that any other agency or authority of the United States gathers or makes available.

B. Department of Homeland Security

Unlike most of the other Agencies, DHS has not previously issued final regulations related to the participation of faith-based organizations in DHS programs. In 2008, DHS issued a notice of proposed rulemaking on this subject. Nondiscrimination in Matters Pertaining to Faith-Based Organizations, 73 FR 2187 (Jan. 14, 2008). In 2015, DHS issued a supplemental notice of proposed rulemaking (“SNPRM”) in concert with the other Agencies. The SNPRM addressed comments received in response to the 2008 notice of proposed rulemaking and proposed additional changes to address Executive Order 13559. Except as directly relevant to additional comments received on the supplemental notice, DHS does not further address those earlier comments here. DHS incorporates by reference the preambles to the 2008 and 2015 proposals, except where the 2008 proposed regulations were superseded by the discussion in the SNPRM, or either proposal is superseded by the discussion here.

DHS received a total of 86 comments on its SNPRM by October 7, 2015, and did not consider one comment received substantially after that date. Many of the comments were identical or nearly identical to comments provided to the other Agencies and addressed above in part III, although some of these cross-cutting comments did not directly apply, or did not apply in the same way, to DHS. Some of those cross-cutting comments included additional remarks related to DHS's SNPRM; in addition, DHS received several other comments specific to its SNPRM. Approximately half of the comments DHS received were identical, or nearly identical, to one another. Many comments expressed general support for the regulations, while other comments flatly opposed any Federal financial assistance being provided to faith-based organizations. Those general issues were addressed in part III above.

In the following discussion, we address DHS-specific issues related to each of the comment areas addressed in part III. Except where specifically noted, to the extent that a comment addressed in part III pertained to the DHS SNPRM, DHS adopts the analysis provided therein. In addition to the changes noted here, DHS has made small editorial changes to improve the readability of the final regulations.

The following responds to additional comments received in response to the SNPRM.

1. Prohibited Use of Direct Federal Financial Assistance

a. “Explicitly Religious” Activities

DHS concurs with the discussion of this subject in part III. DHS's SNPRM included language that faith-based organizations may not be disqualified from receiving grant funds due to their religious motivation, character or affiliation. This revised language appears in final 6 CFR 19.3(b).

b. Chaplaincy

As explained in part III, DHS has made changes to 6 CFR 19.3(e) to harmonize language with the Agencies and further clarify that the regulations do not affect DHS's ability to fund services that can permissibly be funded under the Establishment Clause, notably chaplaincy services. All of the comments DHS received on this subject are addressed in part III.

2. Direct and Indirect Federal Financial Assistance

As explained in part III, DHS's SNPRM had differentiated more sharply than some other Agencies with respect to the application of nondiscrimination requirements to beneficiaries of indirect assistance. For the reasons explained above, the final DHS regulations are now consistent with those of other Agencies; the beneficiary protection against nondiscrimination now also applies to programs in which faith-based organizations receive indirect assistance. Although recipients of indirect assistance must comply with the nondiscrimination requirement, such recipients need not modify their program activities to accommodate beneficiaries. These changes appear in final 6 CFR 19.5.

3. Intermediaries

a. Role of Intermediary Organizations

Summary of comments:

DHS received specific comments regarding this issue, addressed generally in part III, recommending that the responsibilities of intermediary entities to ensure compliance with the regulations be spelled out more clearly. These commenters urged that some of the language in the preamble to the SNPRM be more clearly articulated in regulatory text.

Response:

The fundamental requirement that an intermediary ensure compliance by sub-recipients is included in the definition of “intermediary” in 6 CFR 19.2. As explained in part III, however, DHS agrees that the SNPRM did not fully specify intermediary entities' roles in receiving complaints or making referrals where a recipient organization was unable to do so. Accordingly, the final regulations clarify that complaints may go to either DHS or an intermediary entity, and that when a recipient is unable to make a referral despite reasonable efforts, it may report that failure to either DHS or the intermediary. The intermediary in turn will report the need for referral assistance to DHS, and will either help to make the referral itself or seek further assistance from DHS. These changes appear in final 6 CFR 19.6(a)(5) and 19.7(d), respectively. The model beneficiary notice form in appendix A has also been revised to provide an opportunity for recipients or intermediaries to include contact information for an intermediary.

Change:

None.

4. Protections for Beneficiaries

DHS concurs in the discussion of this subject in part III. DHS's SNPRM made clear that the individual beneficiary notice is only required for recipients of direct assistance. Accordingly, no change is made in response to that issue. However, DHS has revised the requirements related to the content of beneficia

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